HB 171 

.F43 
V. 2 
Copy 1 



MANUAL 



OF REFERENCES AND EXERCISES 
IN ECONOMICS 



Copyriglit, 1917, by 
Thk Century Co. 



^ MANUAL 

OF REFERENCES AND EXERCISES 
IN ECONOMICS 



FOR USE WITH 

VOLUME 11. MODERN ECONOMIC PROBLEMS 



BY 

FRANK A. FETTER, Ph.D., LL.D. 

't 

PROFESSOR OF ECONOMICS, PRINCETON UNIVERSITY 




jV^>jjljjijj _|- j ^-fj'f. 



NEW YORK 

THE CENTURY CO. 

1917 



^3^'^^ 

y*^ 



APR 10 1917 

©CI.A459t>94 



FOREWORD 

^ This Manual follows the lines of the ''Manual of References and 
Exercises," published in the autumn of 1916, to accompany the volume 
on Economic Principles. 

The literature of the field treated in '"Modern Economic Problems" 
is now so vast that no more than a few of the titles could be included 
in the following lists. The references given are usually the more 
recent of those that would be helpful to students desiring to go more 
deeplj^ into the subjects. 

The collection of questions and exercises is based upon the list 
printed, first in 1904 and much enlarged in 1910, in the author's 
''Principles of Economics." Much material has been added that had 
been shaped and used in class work at Princeton University, and a 
few other problems have been drawn from, or suggested by, other 
published lists. The plan of indicating the original sources of a num- 
ber of these questions has been found to be too difficult to be com- 
pleted for the present edition. Indeed, it appears that numerous test 
problems have become a common heritage for economic teachers, and 
one can hardly be sure when one has traced the ideas to their original 
sources. Some of them have appeared in somewhat differing forms in 
various lists for a half century past. 

Particular acknowledgment is made to my colleagues, Professors 
Adriance and McCabe, who devised a number of the questions for class 
use; and to Dr. Stanley E. Howard, who has given most valuable aid 
in the preparation of this Manual in its present form. 

F. A. .F 

Princeton, N. J., February, 1917. 



MANUAL 



OF REFERENCES AND EXERCISES 
IN ECONOMICS 



MANUAL 



OF REFERENCES AND EXERCISES 
IN ECONOMICS 

CHAPTER 1 

' MATERIAL RESOURCES OP THE NATION 

Refehences. (Those marked with an asterisk (*) are the shorter 
assignments that are most applicable.) 

Adams, G. C, Commercial geography. 190G. 

Marsh, G. P., Man and nature: or physical geography as modified 
by human action. 1864. (Later editions under the title, "The 
earth as modified by human action.") 

*Materials, 58-61 (Extract from Mason, 0. T., Technogeography, or 
the relation of the earth to the industries of mankind. Ameri- 
can Anthropologist, 7: 135-158. 1905); 61-66 (extract from 8em- 
ple, E. G., Influence of geographic environment. 1911.) 

Smith, J. R., Industrial and commercial geography, 1913. 

* Source Book, 292-302 (extract from) ; Daniels, W. M., Economic 
causes as affecting the political history of the United States. 
Accountants' Magazine, May, 1907. 

Teele, R. P., Irrigation in the United States. 1915. 

Trotter, 8., the geography of commerce. 1903. 

United States Census, 1910. Volume on wealth, debt, and taxation. 

Van Rise, C. R., Conservation of natural resources. 1910. 

Questions. 

1. What relation can be observed between general industrial con- 
ditions and the per capita wealth? Between the character of the 
people and the per capita wealth? Can countries be grouped geo- 
graphically according to per capita wealth? 

2. How does the United States compare with other countries with 
respect to the estimated amounts and values of cereal products? 
Textile fibres? Coal? Iron and copper ore? Present the results of 
your study in tabular form. 

3. From the reports of the Thirteenth Census prepare a statement 



10 MANUAL OF REFERENCES 

in tabular form showing the geographical distribution of our chief 
domestic sources of supply of the leading cereals, of neat cattle, of 
textile fibres, of coal, iron ore and copper ore, and of water power. 

4. What physical conditions account for the greatness of ancient 
Egypt, of Venice, of Holland, of England, of the United States? 

5. Has the isothermal line any relation to the number of million- 
aires ? 

CHAPTER 2 
THE PRESENT ECONOMIC SYSTEM 

References. 

Cooley, C. H., Human nature and tlie social order. 1902. 

Cooley, C. H., Personal competition. Amer. Econ. Assn., Econ. 
Studies, 4: 78-173. 1899. 

*Ely, R. T., Competition: its nature, its permanency, and its benefi- 
cence. A. E. Assn. Pubs., 3d ser., 2: 55-70. 1901. 

Ely, R. T., Evolution of industrial society. 1903. 

Ely, R. T., Property and contract in their relation to the distribu- 
tion of wealth. 1914. (2 vols.) 

Giddings, F. E., The economic ages. P. S. Q., 16: 193-221. 1901. 

*Crray, John H., Economics and the law. A. E. Rev., 5 (no. 1, 
supp.):3-23. 1914. 

K'inley, David, The renewed extension of government control of 
economic life. A. E. Rev., 4 (no. 1, supp.) : 3-17. 1914. 

ScUmoller, Gustav, The mercantile system. Trans, by Ashley, 1896. 

Questions. 

1. State briefly and criticize tlie theories of the origin of private 
property. 

2. What have been the theories put forward to justify the system 
of private property in tlie past? 

3. Under private property, can men complain of the use made by 
others of their wealtli on the ground merely that it was imwise? 

4. What are the recognized limitations upon the right of private 
property? Are these limitations in opposition to the principle by 
which private property is now generally defended? 

5. Is the right of bequest a necessary condition of private property? 

6. Do you know of any father who created more wealtli because 
he could bequeath it to his son? 

7. Does the son work as hard when he inherits his father's wealth? 

8. What is the efl'ect of private property on saving? 

9. What is meant by the "Factory System." 

10. Through what historic stages has production passed? 



AND EXERCISES IN ECONOMICS 11 

CHAPTER 3 

NATURE, USE AND COINAGE OF MONEY 

References. 

Jevons, W. S., Money and tlie mechanism of exchange. 1875. Chs. 

III-VII, XIII. 
*Johnson, J. F., Money and currency. 1905. Chs. I, II, IX. 
*Phillips, C. A, (Ed.), Readings in money and banking. 191G. 

Chs. I-III, XIV. 
Walker, P. A., Money in its relations to trade and industry. 1st ed. 

1879. Chs. I, II. ; 

White, Horace, Money and banking illustrated by American history. 

Ed. 1914. Bk. I. 

Questions. 

1. What are the qualities of metallic money? 

2. What is the difficulty in deciding whether to call the following 
money: gold ingots, gold coin, silver dollars, copper cents, greenbacks, 
bank-checks, chalk-marks to keep account? 

3. W^ho makes coins? Would jewelers make better ones? 

4. What are' the advantages and disadvantages of a seigniorage tax? 



CHAPTER 4 
THE VALUE OF MONEY 

References. 

Fisher, Irving, The purchasing power of money. 1911. 

Gibson, Thomas, Special market letters on the increasing gold sup- 
ply and its effect on security values; interest rates; commodity 
prices, etc. 1908. 

*Johnson, chs. Ill- VIII, X. 

K^mmerer, E. W., Money and credit instruments in their relation 
to general prices. 2d ed. 1909. 

Magec, J. D., Money and prices. J. P. E., 21:681-711, 798-818. 
1913. 

*Phillips, chs. VIII, XI. 

Round table discussion. Money and prices. A. E. Assn. Bui., 4th 
ser., 1 (no. 2) : 46-70. 1911. 



12 MANUAL OF REFERENCES 

* Source Booh, 303-313. (Extract from report of the Secretary of 

the Treasury, 1911.) 
United States Secretary of the Treasury, Finance report, 1911. 
Walker, F. A., chs. IV, V. 

Questions. 

1. What are the functions of money? 

2. What are the principal things besides money uses that cause a 
demand for gold and silver. 

3. Why do you value money? Do you value it more than the 
things it buys ? 

4. When goods are exchanged for money or money for goods, what 
is the gain? , 

5. If money is a tool, what docs it make? 

6. When gold comes out of the mine is the gain to the community 
greater or less than when the same value of grain is harvested? 

7. Are men wealthy in proportion to the money they have? Are 
countries ? 

8. Would a nation be poorer, if, like Sparta, it prohibited all 
money ? 

9. Is a community poor because it has little money in circulation 
or does it have little money in circulation because it is poor? 

10. Could a country better do without money, horses, or roads? 

11. Why does nearly all the gold produced in California leave the 
state? What keeps any of it there? 

12. The mint price of an ounce of gold, .900 fine, is alike at San 
Francisco and Philadelphia, $18,604. Why is gold ever shipped from 
California to New York? 

13. Does gold cost the day-laborer as much in California as in New 
York? 

14. Note any habits of friends that result in their carrying more 
or less money than others of the same income. 

15. What determines the amount of money needed by different per- 
sons, towns, states, and nations? 

16. Give examples of things that increase the demand for money. 

17. On an isolated island would it make any difference as to the 
-I value of money if there were but one gold-mine or several competing 

ones, supposing that the output were the same? 

18. What per cent, of the total money iji the world is the yearly out- 
put of gold; of silver; of gold and silver? Stat. Abst. 

19. Is the value of gold and silver due to the action of govern- 
ment ? 



AND EXERCISES IN ECONOMICS 13 

20. In what ways may the government determine the value of the 
monetary standard? 

21. If all the different denominations of media of exchange were 
doubled in number, exchanges remaining unchanged, what would be 
the effect upon prices? 

22. Is it true of all commodities that changes in supply affect their 
value proportionally? Is it true of money? If in your opinion there 
is any difference, explain it. 

23. If the amount of coal in a country should be increased twenty- 
five per cent., in what percentage would you expect the value of coal 
to change? Give reasons. If the amount of money in a country should 
be increased twenty-five per cent., in what direction and in what 
percentage would the value of money change? Give reasons. (In each 
case the condition is "other things being equal.") 

24. If in a given community all watch cases were made of gold, and 
each case contained one ounce of gold, w^ould you expect the value 
of watch cases to fall by exactly one-half if the number of watch 
cases in the community were doubled, all other things remaining the 
same? If in another community (at another time) all exchanges 
were made exclusively by the use of gold coins, each containing an 
ounce of pure gold, would you expect that prices in general would 
be exactly doubled in case no change occurred in the community ex- 
cept a doubling of the number of coins in circulation? 

25. Why might an increased resort to barter produce upon the 
general level of money prices effects similar to those produced by an 
increased use of credit media of exchange? 

26. What gives rise to the belief sometimes held that money is an 
invariable standard of value? 

27. Define depreciation and appreciation of the currency. What 
causes may produce either? What are the effects of either? More 
generally, what determines the value of the currency? 

28. If gold were to become as plentiful as iron, would it be worth 
more or less than iron? 

29. A nation having no foreign trade had originally in circulation 
1,000.000 coins, each called a florin, and each containing an ounce 
01 pure metal. To this original coin circulation the government adds 
500,000 florins each containing one-half ounce of pure metal, and at 
the same time the government adds to the circulation 600,000 florins 
in the shape of inconvertible paper. Both the half ounce florin and 
the paper florin are by law made legal tender for a full weight florin. 
In the absence of any tendency to discriminate between accepting dif- 
ferent kinds of florins in domestic trade, and with no other changes 



14 MANUAL OF REFERENCES 

in the money situation except such as arc necessitated by the afore- 
said additions to the circulatin^j medium, tell, first, what ultimately 
will be the number of florins in circulation, and give your reasons; and 
tell, second, of what kinds of florins and in what proportions the ulti- 
mate circulating medium will be composed. 

30. Assume a country using gold alone as money and having in 
circulation 2,000,000 coins, under a system of free coinage. What 
would be the effect of closing the mints and issuing 1,500,000 new 
coins containing nine-tenths as much gold as the coins above men- 
tioned, assuming that the number of goods exchanged remains the 
same? Explain clearly. What is the total quantity of such new 
coins the government can issue and keep in circulation? Explain 
clearly. 

31. A country using gold money as its sole medium of exchange, 
under free and gratuitous coinage, makes the following change: it 
imposes a seigniorage charge of ten per cent., but without giving up 
free coinage or reducing the amount of fine gold in the coin. To wliat 
extent and in what direction will the value of money change, if at all 

(a) if the number of goods exchanged gradually increases 
five percent. ; 

(b) if the number of goods exchanged gradually increased 
twenty-five percent.? 

Give your reasons clearly. 



CHAPTER 5 

FIDUCIARY MONEY, METAL AND PAPER 

References. 

*Jevons, chs. VIII, XVII, XVIII. 

*Johnson, chs. XIII-XVI. 

Kemmerer, E. W., Modern currency reforms. 1916. 

"Phillips, chs. IV, V, XII. 

United States Director of the Mint, Annual reports. 

WalJcer, chs. VIII-XII. 

White, Bk. II, chs. III-VI. 

Questions. 

1. When 5160 grains of standard gold (i.e., by weight nine-tenths 
fine, with the other tenth composed of the alloy used in gold coin 
of the United States) sell in New York for $201.25 has the money 
"saturation point" been reached or exceeded, and will bullion be taken 
to the mint or coin melted down or exported? 



AND EXERCISES IN ECONOMICS 15 

2. Define legal-tender as applied to money. What is meant by fiat 
money ? 

3. Is a United States standard silver dollar commodity or fiduciarj' 
money? What determines its value? Of what importance is its legal 
tender quality? 

4. Is the provision of law whereby the fractional silver coins of 
the United States arc of less proportionate silver content than the 
standard silver dollar necessary to-day? Is it useful? Give your 
reasons. 

5. Under what conditions will "bad money" fail to displace "good 
money"' from circulation ? 

6. Under what circimistances will money that is not in fact con- 
vertible into other money have greater value than the material of 
which it (the first mentioned money) is made? Give an example 
from the monetary experience of the United States. 

7. In a country which has hitherto had free and gratuitous coin- 
age of gold, the government institutes a seigniorage charge of five 
per cent, by reducing to that extent the amount of gold put into each 
coin ; the gold withheld by the government is not coined. What will 
be the effect of this seigniorage charge upon (a) prices in that country, 

(b) the comparative value of the gold in a new coin and the same 
weight of uncoined gold? Make your reasoning clear. 

8. If a nation's entire money circulation consisting of 1,000,000 
coins, all of them debased by a seigniorage charge of 50 per cent., were 
at once increased by the government's putting into circulation 300,000 
pieces of inconvertible paper money, each piece of the same demonina- 
tion as each coin, what effects might be anticipated on the basis of 
Gresham's law or otherwise, it being presupposed that the full amount 
of full weight coin required to conduct the nation's exchanges is only 
900,000? Give your reasons. 

9.! A certain island has no silver mines and no foreign trade. 
It effects all xts exchanges by the actual use of silver coin whose 
coinage is free and gratuitous. It has no banks, and does not resort 
either to barter or to credit. Silver is also used in the shape of plate 
in the island. Originally it had 100,000 silver coins in circulation, each 
containing one ounce of pure silver. After a certain date, as these 
coins were paid into the government treasury for taxes, at the rate 
of 5,000 one-ounce coins per week, the one-ounce coins were melted 
and the resulting bullion was recast, each new coin weighing 2 ounces 
and bearing the same name as the original one-ounce coins. Thereafter 
all coins struck at the Island Mint contained two ounces of silver, and 
at that standard coinage continued free and gratuitous. W^hen the 



16 MANUAL OF REFERENCES 

govornnicnt first pays out the new 2-ouncc pieces, will they remain in 
circulation with the old one-ounce coins and have the same purchasing 
power? Give reasons. 

10. If the above-described process of reminting 5,000 one-ounce coins 
per week continues for twelve weeks and then stops, how many old 
and how many new coins will at the end of the twelfth week be in 
circulation ? Reasons. 

11. The government of the island of Guernsey having no money, is- 
sued paper-notes to pay for the building of a market. They circu- 
lated and were gradually taken up as the market earned its cost, 
during ten years. When they were all redeemed and burned, the 
island had the market free of cost. Explain how this could be done. 
(From Sumner's Problems in political economy.) 

12. Suppose a nation has 1,000,000,000 gold coins, each weighing 
one ounce (Troy) as its only circulating medium. Suppose that the 
government enacts that henceforth coins will be uttered containing 
only 99 per cent, as much pure gold as heretofore, the government 
taking one per cent, for its own use. 

Suppose "other things remain the same." What effect will this 
action have on the number of coins circulating? 

Will prices be affected? 

Now suppose the demand for money increases. W^ill bullion owners 
bring their bullion to the mint for coinage? 

Suppose this government had continued to utter coins of the same 
weight and fineness as before, but had kept back one per cent, of the 
bullion brought to the mint for its own use. Answer these three 
questions in the light of this supposition. 

13. Tabulate the index numbers, the greenback price of the gold 
dollar, and the gold price of the greenback dollar, from 1861 to 1879. 

14. Show the difference between convertible and inconvertible money. 

15. Contrast the position of the commodity money theorists with 
that of the fiat money theorists. 

16. In a gold-standard country, one-half of whose monetary circula- 
tion consists of silver dollars (which are unlimited legal tender) and 
of silver certificates payable on demand in silver dollars (and sup- 
ported dollar for dollar by silver dollars in reserve), and whose 
mints are closed to tlie free coinage of silver, how would the money 
value of the silver dollars and silver certificates be affected if the 
gold price of silver should fall (1) 10 per cent.? (2) 50 per cent? 
(3) 5 per cent.? How would it be affected if the value of gold 
should fall 10 per cent? (Free coinage of gold is assumed). Explain 
the principles involved in your answer. 



AND EXERCISES IN ECONOMICS 17 

CHAPTER 6 

THE STANDARD OF DEFERRED PAYMENTS 

References. 

Fisher, Irving, Appreciation and interest. A. E. Assn. Pubs., 

11:331-442. 1896. 
Fisher, Irving, A remedy for the rising cost of living — standardizing 

the dollar. A. E. Rev., 3 (no. 1, supp.) : 20-28. 1913. Round 

table discussion of above, 29-51, 
Fisher, Irving, Objections to a compensated dollar answered. A. E. 

Rev., 4: 818-839. 1914. 
*Jevons, ch. XXV. 
* Johnson, chs. XI, XII, XVII. 
Kinley, David, Objections to a monetary standard based on index 

numbers. A. E. Rev., 3: 1-19. 1913. 
"Materials, 787, 788 (extract from Brown, H. G.,) , 788, 789 (extract 

from Clark, W. E., in "How to invest when prices are rising." 

1912). 
Noycs, A. D., Forty years of American finance. 1909. Chs. I-III. 
Patterson, E. M., Objections to a compensated dollar. A. E. Rev., 

3:863-874. 1913. 
*PhiIlips, chs. VI, VII, XIII. 
Taussig, F. W., The plan for a compensated dollar. Q. J. E., 

27:401-416. 1912-1913. 
United States Bureau of Lahor Statistics, Bui. 173. 1915. 
Walker, chs. Ill, VI, VII. 

Questions. 

1. In which year between 1890 and the present year would a fixed 
salary of $1,000 have gone farthest? In which year would its purchas- 
ing power have been least? If a sum of $1,000 loaned in 1897 was 
returned in 1902, what was tlie diflference in its purchasing power 
on its return and when it was loaned? 

2. Will a day's work of a common laborer buy more to-day than 
it would a half century ago? Why? 

3. The Bureau of Labor's index number for 1912 was 133. What 
was the percentage change in the value of money from the base period 
to 1912? Give your reasons and your work. 



18 MANUAL OF REFERENCES 

4. Average prices for 

years 1860-65. Prices for 1900. 

Coffee, lb $ .12 $ .18 

Coal, ton 3.00 3.60 

Sugar, lb 08 .06 

Wool lb 30 .20 

Wheat, bii. . ^ . . .80 .00 

Upon the basis of the piftes of the above commodities estimate the 
general price level for 1900, showing the percentage of its decline or 
advance from the basal price level. Indicate some of the causes which 
may have brought about this decline or advance. 

5. At a given time the following commodity prices prevailed: 
cotton (raw), $.10 per lb.; wheat, $1.00 per bu.; sugar, $.07 per lb.; 
potatoes, $1.00 per bu.; beef (for roasting), $.25 per lb.; shoes, $5.00 
per pair; cotton cloth of a standard grade, $.12 per yd.; woolen cloth 
of a standard grade, $1.25 per yd.; men's hats, $4.00, and coal, $7.00 
per ton. 

At a later date the prices of the same commodities were respectively 
as follows: $.13, $1.05, $.06, $1.10, $.30, $5.75, $.15, $1.20, $4.50 
and $6.50. 

Tabulate these facts and compute index numbers, which will show: 

(1) changes in the price level of all ten commodities. 

(2) changes in the price level of the articles of food. 

(3) changes in the price level of the articles of clothing. 

6. In the preceding exercise, do the data afford sufficient grounds 
for saying that the cost of living has moved either upward or down- 
ward? 

If an affirmative answer be assumed, what has been the change in 
the value of money? 

7. Assign to each of the commodities listed above a "weight" 
which represents, in your opinion, its importance as an article of 
popular consimiption. Using this system of weights compute index 
numbers to show changes in the price levels of the same groups of com- 
modities. How does the weighting affect your first conclusions regarding 
the changes in the cost of living. What is the importance of a system 
of weighting? 

8. If the world's annual production of gold should suddenly in- 
crease five-fold, what would be the probable effect: upon the welfare 
of a stock exchange speculator as compared with the welfare of a 
teacher; upon the welfare of the creditor class as compared with that 
of the debtor class; upon prices? 

9. What is the function of the standard of deferred payments? 



AND EXERCISES IN ECONOMICS 19 

What is that standard now in America? Wliat change in it has lately 
been going on? How is this affecting the incomes of various classes? 

10. What ought to be the cliaractcristics of a standard unit of 
value ? 

11. Can you get a kind of money that will make the things that are 
sold, dearer, and the things that are bought, cheaper? 

12. Is the fact of one man's gain and another man's loss by chance 
of any economic or political importance? 

13. If every piece of money should miraculously be doubled in a 
night, whose interests would be affected? 

14. Compare the effect of an increasing gold output upon the price 
of outstanding bonds with its effect upon the price of common stock 
already issued. 

15. X is an isolated industrial country Avith a certain volume of 
money. Its government on a given day doubles the amount of cur- 
rency. What Avill be the effect upon the rate of interest. 

( a ) of long-time loans, 

(b) of short-time loans, and 

(c) of demand loans? 

16. The rate of interest on long-time investments in a certain 
isolated community has been six per cent. The amount of money in 
this community is increased so as to raise the general level of prices 
by 100 per cent. Assuming that the increase in money has come 
wholly from the more copious output of money-metal from the mines, 
to what extent will this rise in the general level of prices affect the 
rate of interest when thereafter capital is loaned for long-time periods? 

17. Could a railway in the United States advantageously float a 
large issue of 20-year bonds in the year 1D16? Give reasons for your 
answer. Show clearly what you mean by "advantageously." Would 
a railroad wish to float sucb an issue if it could? Why? 

18. Is there anything in the nature of mining that keeps the ratio 
of the sufjjjly of gold and silver nearly uniform? 

19. Some say Providence has indicated gold and silver as the ma- 
terials for money. How has this been done? 

20. What are the main reasons given for the ratio of 16 to 1? 

21. Does the principle of the substitution of goods have any bearing 
on the value of metals under bimetallism? 

22. What is the theory of money held by bimetallists ? 

23. "Inasmuch as gold (before 1848) was more valuable on the 
world's market than at the French mint, relatively to silver, it was 
impossible that gold should circulate in France." Is this a necessary 
conclusion ? 



20 MANUAL OF REFERENCES 

24. What arguments advanced in favor of bimetallism in 1896 are 
inapplicable to-day ? 

25. WJiat is the extent of the influence one nation can have on the 
ratio of the two precious metals? 

^6. How would the adoption of international bimetallism to-day at 
the ratio of 32 to 1 affect (a) the circulating medium, (b) the 
standard of value in different countries? Consider both the imme- 
diate and the eventual results. 

27. What would have liappenod if a free silver law had been enacted 
in the United States in 1000? 

28. Would an ideal monetary standard always measure the same 
quantity of goods? 

29. A owes B a long term debt, which falls due just before the 
commencement of a commercial crisis; would it be to the advantage 
or disadvantage of A if the contract called for payment in terms of a 
tabular standard? 

30. Why has not the tabular standard of deferred payments come 
into common use? Is the tabular standard sound or imsotmd in prin- 
cij)le? Would your answer apply to the labor standard? 



CHAPTER 7 
THE FUNCTIONS OF BANKS 

Refebences. 

Cleveland, F. A., Funds and their uses. 1902. 

Conant, C. A., History of modern banks of issue. 5th ed., 1915. 

Dunbar, C. F., Theory and history of banking. 2d ed., 1901. 

Fisk, A. K., The modern bank. 1903. 

Holdsworth, J. T., Money and banking. 1914. 

Kinley, David, The specie reserve in a banking system. J. P. E., 

20: 12-24. 1912. 
"Phillips, chs. IX, X. 

Scott, W. A., Money and banking. 1903. 
Vehlen, T., Theory of business enterprise. 1904. 
*White, bk. Ill, chs. I-III. 

Questions. 

1. What does a bank do for a community? 

2. Wliat are the functions performed by a bank? 

3. Wliat are the sources of income to a bank? 

4. Explain the most important ways in which the deposits of com- 



AND EXERCISES IN ECONOMICS 21 

mercial banks originate; and state which of these ways creates the 
greatest amount of demand liabilities of the banks. 

5. Do all banks issue notes? Why? 

6. What is the advantage to a bank of the right to issue bank 
notes ? 

7. How does the issue of bank notes differ from the lending of 
funds to depositors? 

8. Can a bank that issues its own notes afford to lend cheaper than 
the ordinary capitalist? 

9. Two men A and B have notes each for $1000 discounted at 
the same bank. A is credited on the bank's books with the right to 
draw §950. B receives $950 in the circulating notes issued by this 
bank. Are the bank's liabilities increased to precisely the same extent 
by the two transactons? Does either transaction immediately lessen 
the bank's cash reserve? 

10. The following are the items of a report of a National Bank: 
Capital stock, $50,000; Cash on hand and in banks, $77,066.21; 
Circulation, $49,400; Bills payable, $10,000; United States and other 
bonds, $239,050; Deposits, $465,417.41; Surplus and net undivided 
profits, $30,952.58; Loans and investments, $289,653.78. 

(a) Separate and arrange these items in accordance with a regular 
bank statement and prove your answer. 

(b) Show how these items illustrate the essential functions of a 
bank, exjjlaining in detail the nature of these functions. 

11. Sort out from the following items the resources and liabilities 
and show the equality of total resources and total liabilities: 

Unpaid dividends $ 782.00 

Reserved for payment of taxes due 10,000.00 

Undivided profits 85,228.57 

Capital stock 500,000.00 

Surplus fund 250,000.00 

Cash items (checks to be presented for settlement in next 

day's exchanges) 280,347.43 

Loans and discounts 2,782,713.15 

U. S. legal tender notes and notes of national banks 435,296.00 

Specie 278,304.48 

Deposits 4.057,934.61 

Overdrafts (checks paid in excess of deposits) 2,842.10 

Due from banks and bankers 370,142.02 

Real estate 43,900.00 

Mortgage owned 1,000.00 

Bonds 709,400.00 



22 MANUAL OF REFERENCES 

12. Classify the following items as resources or liabilities of a na- 
tional bank and give reasons for your classification of the 1st, 4th, 6th, 
and 7th: (1) Capital stock, $50,000; (2) Real estate, furniture, 
fixtures, etc., $15,046.14; (3) Cash, $69,343.34; (4) Surplus and net 
undivided profits, $19,257.43; (5) United States bonds, $108,951.50; 
(6) Loans and discounts, $242,546.36: (7) Deposits, $301,679.91; (8) 
Circulation (i.e., notes outstanding), $64,950. 

Prove that your classification is correct by balancing the account. 
Then show the changes made in the account by the following trans- 
action: The bank loans $25,000.00 for 90 days at 6 per cent, interest, 
and tlie borrower draws out one-half tlie amount, with which he is 
credited after the bank has made the proper deduction for interest. 

13. The week's averages of the New York banks for the third week 
in May compare as follows in 1905 and 1904: 

1905. 1904. 

Loans $1,120,426,800 $1,056,553,500 

Deposits 1,165,151,700 1,100,586,100 

Circulation 45,308,300 36,480,400 

Specie 215,174,200 210,002,800 

Legal tenders 84,333,700 78,143,000 

Explain why loans and deposits in the above table show practically 
the same increase from 1904 to 1905. 

14. How would the balance sheet of a commercial bank issuing an 
ordinary asset bank-note currency stand after the following operations? 

The bank opens business with a paid-up capital of $2,000,000 and a 
surplus of $400,000. It spends $50,000 in its own bank notes for 
furniture and fixtures. It discounts at six per cent, for various cus 
tomers $4,000,000 of 60-day notes and bills receivable, the borrowers 
taking one-fourth of the proceeds in cash, one-fourth in the bank's 
own bank notes, and leaving the balance on deposit. Customers cash 
checks on their accounts for $600,000 receiving two-thirds of the 
amount in the bank's own bank notes and the other third in coin and 
other kinds of "lawful money." Other customers make deposits of 
$900,000, of which one-third is in "lawful money," one-third in the 
bank's own bank notes, and one-tliird in the cheeks of other depositors 
in the same bank. The bank buys at par $1,200,000 of railroad bonds, 
paying for them in its own bank notes. It pays with its own bank 
notes expenses for wages, stationery and taxes to the amount of $10,- 
000. (b) What percentage of reserve is it carrying at the end of 
these operations? 



AND EXERCISES IN ECONOMICS 



23 



15. Statement of a national bank. 



LIABILITIES 



Capital, 

Surplus, 

Undivided profits, 

Circulation, 

Deposits, 

Due banks, 



1,572. 



BESOUECES 



$ Thousand 



464. 


Loans and discounts, 


708. 


203. 


Over-drafts, 


.1 


53. 


Bonds to secure circula- 




404. 


tion (par value) 


450. 


419. 


Other stocks and bonds, 


163. 


29. 


Due from reserve agents. 


105. 




Due from banks. 


21. 




Banking house, 


32. 




Current expenses and taxes, 


3. 




Checks and cash items. 


4. 




Exchange for Clear. House, 


11. 




Notes of other banks. 


15. 




Gold, 


30. 




Silver, 


.9 




Legal tenders. 


9. 




Redemption fund in U. S. T 


. 20. 



1,572. 



What can you learn from this statement about the kind of business 
which the bank is carrying on, and its power to withstand a financial 
storm ? 

16. How would the balance sheet of a commercial bank stand after 
the following operations? The bank begins business with a paid-up 
capital of $300,000 and a surplus of $60,000. It discounts for cus- 
tomers $600,000 of four-months notes and bills receivable, at 6 per 
cent., the borrowers taking one-third of the proceeds in cash (i.e., 
lawful money), and leaving two-thirds on deposit. Customers deposit 
$200,000, of which one-half is in cash, one-quarter is in checks drawn 
on this bank, and one-quarter is in checks drawn on other banks. 

17. Suppose that this bank now reorganizes as a national bank and, 
to secure the privilege of note issue, buys United States 2 per cent, 
bonds of a par value of $90,000 at $102.. These bonds it deposits 
with tlie Treasurer of the United States and receives the full amount 
of national bank notes to which it is entitled. Depositors withdraw 
by check $180,000, the bank giving them $45,000 in its notes and the 
balance in lawful money. A dividend of 2 per cent, is declared, and 
is paid, one-half in lawful money and one-half in the form of deposits. 
Present the balance sheet. 



24 MANUAL OF REFERENCES 

CHAPTER 8 
BANKING IN THE UNITED STATES BEFORE 1914 

References. 

Hollander, J. H., Security holdings of national banks. A. E. Rev., 
3:793-814. 1913. 

Kemmerer, E. W., Banking reform in the United States. A. E. Rev., 
3 (no. 1, supp.) : 52-03. 1913. Round table discussion of above, 
64-88. 

Kemmerer, E. W., Seasonal variations in the New York money mar- 
ket. A. E. Rev., 1: 33-49. 1911. 

National Monetary Commission, Report. 1912. In Sen. Doc. 243, 
62d Cong., 2d Sess. 

Phillips, ch. XXX. 

* Source Book, 324-336 (extract from National Monetary Commis- 
sion Report), 314-323 (extract from 1910 report of the Comp- 
troller of the Currency ) . 

Sprague, 0. M. W., Proposals for strengthening the national bank- 
ing system. Q. J. E., 24: 201-242, 634-659; 25: 67-95. 1909-1911. 

United States Comptroller of the Currency, Annual reports. 

*White, bk. Ill, chs. IV, XV, XVII, XX, XXI, and appendices 
A and B. 

Willis, H. P., The banking question in Congress. J. P. E., 
20:869-885. 1912. 

Questions. 

1. Explain the method followed by national banks in issuing bank 
notes. Why did the banks often find it more profitable to use their 
money in other ways than by issuing bank notes ? Ref . : Discussion in 
various reports of Comptroller of the Currency. 

2. Section 28 of the National Bank Act of June 3, 1864, after pro- 
viding that a national banking association may hold real estate "nec- 
essary for its immediate accommodation in the transaction of its busi- 
ness" and such other real estate and mortgages thereupon as it may 
have taken to secure debts previously contracted, provides that "Such 
associations (national banks) shall not purchase or hold real estate in 
any otlier case or for any other purpose. ..." 

(a) What is the reason for the above provision? 

(b) Would it be wise to make a similar prohibition on savings 
banks? 

3. Describe the clearing house and define its economic advantages. 



AND EXERCISES IN ECONOMICS 25 

4. If there are twenty banks in a town and no clearing house, how 
many collections would have to be made by all the banks daily as- 
suming that each day depositors of each bank receive checks on the 
other nineteen banks? 

5. Does a clearing house enable the banks that belong to it to get 
along with a smaller cash reserve? 



CHAPTER 9 

THE FEDERAL RESERVE ACT 

References. 

Conway, Thomas, Jr., The financial policy of the Federal reserve 

banks. J. P. E., 22: 319-331. 1914. 
Federal Reserve Board, Tlie Federal Reserve Bulletin. Monthly. 
*Phillips, eh. XXXI. 
Scott, W. A., Banking reserves under the Federal Reserve Act. 

J. P. E., 22: 332-344. 1914. 
White, bk. Ill, ch. XXII and appendices D and E. 
Willis, n. P., The Federal Reserve Act. A. E. Rev., 4: 1-24. 1914. 

Questions. 

1. Name and contrast tlie different kinds of banks in the United 
States. 

2. How are notes issued under tlie Federal Reserve Act? 

3. If on a given date the surplus reserve (i.e., the reserve in excess 
of the legal minimum reserve required by law to be held against 
deposits) of the New York Associated Banks amounts to $11,000,000, 
and the deposits on the same date amount to $1,164,000,000, what is 
the total cash reserve lield by the banks on said date? What would it 
liave been in 1912? 

4. The "New York Times" of December 8, 1916, said: 

"The rediscounting of commercial paper at the Federal Reserve Bank 
of New York by some of the city's largest banks on Wednesday had 
the effect yesterday of improving general money market conditions. 
Call loans which were made at 15 per cent, on Monday, and as high 
as 10 per cent, on Tuesday, and touched seven per cent. Wednesday, 
were placed yesterday at from three to five per cent. Most of the 
loans were made at four and one-half per cent., the renewal rate, and 
the closing quotation was three per cent. Time money rates were 
easier." 

Explain the process of rediscounting here referred to. In just wliat 
way did the rediscounting operations relieve the call money market? 



26 MANUAL OF REFERENCES 

Do yoii consider that this use of the rediscounting facilities provided 
by the Federal Reserve System was in accord with sound banking 
principles? Was it the best possible use of the rediscounting mechan- 
ism? For suggestions see the "New York Times" of December 5, 1916, 
under the heading "Financial Markets." 



CHAPTER 10 
CRISES AND INDUSTRIAL DEPRESSIONS 

References. 

Dewey, D. R., Financial history of the United States, 4th ed., 1912. 

Ch. X. 
England, Minnie T., Promotion as the cause of crises. Q. J. E., 

29:748-767. 1914-1915. 

* Hamilton, Readings, 91-93, 93-95, 95-98. 

Hobson, J. A., Evolution of modern capitalism. Ed., 1912. Ch. 7. 
Jones, E. D., Economic crises. 1900. 

Juglar, C, and Thorn, C. W., A brief history of panics and their 
periodical recurrence in the United States. Ed., 1916. 

* Materials, 391-396. 

Mitchell, W. C, Business cycles. 1913. 

Moore, H. L., Economic cycles: their law and cause. 1914. 

Nelson, S. A., The A B C of Wall Street. 1900. 

Patterson, E. M., The theories advanced in explanation of economic 

crises. A. A. A., 59: 133-147. 1915. 
*Phillips, chs. XXVIII, XXIX. 
*Source Book, 138-156. 
Sprague, 0. M. W., The crisis of 1914 in tlie United States. A. E. 

Rev., 5: 499-533. 1915. 
United States Bureau of Labor, Annual report for 1886. 

Questions. 

1. What is a financial crisis? An industrial depression? 

2. Describe the trade, banking and price conditions which obtain 
just preceding, during and immediately following a crisis. 

3. State clearly and explain the movement of prices of stocks, bonds, 
mortgages, land, commodities generally, wages and interest rates on 
long time and short time loans, before, during, and after a crisis. 

4. Tabulate for a series of years covering periods of prosperity and 
depression, the prices of stocks, bonds, real estate, and of some 
commodities. 



AND EXERCISES IN ECONOMICS 27 

5. What economic changes occurred in your own community in the 
panic of 1893-94, or in the years 1903-04, or in 1907-08? 

6. Is it possible tliat the amount of all goods produced shall be in 
excess of the community's power of consumption ? 

7. "As the average American can produce far more than he can 
consume, it has been proved repeatedly that as long as the sale of his 
products is confined to the home markets, over-production is certain to 
be a natural consequence of every prolonged period of activity. For 
half a century, tlierefore. with regularly recurring seasons of surplus 
production, there came those inevitable commercial crises which em- 
phasized with increasing force the necessity for foreign markets." 
(This passage is taken from a reprint of a speech of a congressman.) 

Criticize the view as to the cause of commercial crises expressed 
in the above statement. 

8. Is a crisis caused bj- too much or too little money, or by some 
other influence? 

9. If there were twice as much money in the world, would panics 
take place? 

10. In a period of depression is there less money than usual in the 
country? In the banks? 

11. In what ways and to what extent are trade conditions apt to 
be affected by: 

The increasing gold supply? 
The trust movement? 
Increasing armies and navies? 
The agricultural situation? 

12. Explain the difference in the motive of the borrower at ordinary 
times and in times of panic. 

13. How are loans affected when the reserve limit as establishe(1 
either by law or custom is reached in England, Germany and the 
United States? 

14. What in your opinion is the correct explanation of crises? 

15. In what ways is business affected by the condition of the crops? 
Within what limitations? In the case of which crops is the connec- 
tion closest? 

16. What element of security is furnished by clearing houses during 
panics? 

17. Describe the method used by the banks in meeting demands of 
depositors during the panics of 1893 and of 1907. (Dunbar is espe- 
cially valuable. Also O. M. W. Sprague, History of crises under the 
National Banking System, pub. by Nat. :Monetary Com.) 



28 MANUAL OF TtEFERENCES 

CHAPTER 11 
INSTITUTIONS FOR SAVING AND INVESTMENT 

Refekences. 

Chamberlain, Laurence, Principles of bond investment. 4th cd., 
1913. 

The work of the bond house. 1913. 

Dcvine, H. C, People's cooperative banks for workers in towns, and 
small holders, allotment cultivators, and others in country dis- 
tricts. 1908. 

Dexter, Seymour, A treatise on coJJperative savings and loan asso- 
ciations. Ed., 1894. 

Fisher, Irving, Kemmerer, E. W., Broicn, II. G., and others, How to 
invest when prices are rising. 1912. 

Quenther, Louis, Investment and speculation. 191G. (La Salle Uni. ) 

Hamilton, J. H., Savings and savings institutions. 1902. 

Johnson, A. 8., Influences affecting the development of thrift. 
P. S. Q., 22: 224-244. 1907. 

Kemmerer, E. W., The United States Postal Savings bank. P. S. Q., 
26:462-499. 1911. 

Kniffin, W. H., The savings bank and its practical work. 1912. 

*PMlUps, ch. XVI. 

Wolff, H. W., A cooperative bank handbook. 1909. 
Cooperative banking. 1907. 
People's banks. 3d ed., 1910. 

Questions. 

1. What are the nature and purpose of legislation restricting the 
investments of savings banks? 

2. What are these restrictions in this state? In your own state? 
In those states which are regarded as having the most highly devel- 
oped laws in this field? 

3. Is legislation in this field to be considered as subsidizing certain 
types of private enterprise? If so, is it socially justifiable? 

CHAPTER 12 

PRINCIPLES OF INSURANCE 

Refeeences. 

Gephart, W. F., Principles of insurance. 1913. 
Gephart, W. F., Insurance and the state. 1913. 
Huebner, 8. 8., Life insurance. 191. '5. 
Huebner, 8. 8., Property insurance. 1913. 



AND EXERCISES IN ECONOMICS 20 

Statistical Abstract of the United States. 

Valgren, V. N., Farmers' mutual firo insurance in Minnesota. 

Q. J. E., 25: 387-396. 1910-1911. 
WiUet, A. H., Economic theory of risk and insurance. 1901. 
Zartman, L. W. (Ed.), Fire insurance. Ed., lOlo. 
Zartman, L. W. (Ed.), Life insurance. Ed., 1915. 

Questions. 

1. Wliat are the conditions of economically sound insurance? Give 
at least two examples. 

2. What is the essential economic difference between gambling and 
insurance? 

3. Give examples showing the difference between a gambling house 
and an insurance company? 

4. Investors in Russian bonds are said to take out policies of insur- 
ance payable to themselves in the event of the Czar's death, their ob- 
ject being to guard themselves against loss by the depreciation of their 
Russian securities in case of political disturbances that might emerge 
upon a change of rulers. 

(a) Do you regard such insurance as gambling or legitimate specula- 
tion from the standpoint of either insurer or insured? 

(b) Do you regard the issue of such policies on the part of the in- 
surance companies as "sound"? 

5. Ought lotteries to be permitted by law? 

6. Suppose 1,000 owners of 1,000 buildings worth $7,000 each wish 
to insure themselves against fire. If the risk for the class of build- 
ings involved in such that seven out of 1,000 burn each year, what 
annual payment from each owner would be necessary to insure all 
against total loss — expenses of management, interest, etc., being ig- 
nored? (F. M. Taylor.) 

7. Suppose that a corporation owns 500 buildings worth $100,000 
each; that to insure against fire in an ordinary company would cost 
$250 for each building; and that the corporation is convinced that by 
the expenditure of $10,000 the fire loss can be reduced to an average 
of one building every three years. Would it pay the corporation to 
insure with some company? (F. M. Taylor.) 

# 

CHAPTER 13 

INTERNATIONAL TRADE 

References. 

Bastahle, C. E., The theory of international trade. 1S07. 
Brown, H. (?., International trade and exchange. 1914. 



30 MANUAL OF REFERENCES 

Glare, G., The A B C of tlic foreign exchanges. 1895. 
Escher, FranJdin, The elements of foreign exchange. 2d ed., 1911. 
Goschen, Viscount, The theory of the foreign exchanges. 1898. 
Johnson, E. R., Probable changes in the foreign trade of the United 

States resulting from the European war. A. E. Rev., 6 (no. 1, 

supp.) : 17-25. 1916. Round table discussion of above, 26-49. 
Johnson, E. R., Yan Metre, T. W., Huebner, G. G., and Hanchctt, 

D. S., History of domestic and foreign commerce of the United 

States. 1915. 
*Source Book, 337-346. 
Willis, H. P., Transportation and competition in South American 

markets. A. E. Rev., 2: 814-833. 1912. 

Questions. 

1. Is it bad policy to let the people of a suburban village spend 
money in the city for things tliat could be produced at home? 

2. Is it bad policy for California to buy New England manufac- 
tures ? 

3. Give examples of the industrial advantages of America as com- 
pared with Europe. 

4. Is the alleged superior efficiency of the American workman over 
the competing workman of Europe connected in any \vay with the 
principle of proportionality? 

5. Community A has lands that can produce wheat at a cost of 60 
cents per bushel, corn at 40 cents per bushel and potatoes at 40 cents 
per bushel. Community B can produce wheat at 70 cents per bushel, 
corn at 45 cents per bushel and potatoes at 42 cents per bushel. Sup- 
posing that each community can raise just enough of these foodstuffs 
for its own use, will there be any incentive for them to exchange 
these products? 

6. "A man is of all sorts of luggage the most difficult to be trans- 
ported."' What is the bearing of this fact upon the theory of inter- 
national trade? 

7. Can a country have a persisting excess of merchandise exports 
over merchandise imports? If so, under what conditions? 

8. If foreign exchange suddenly rose several cents, while imports 
and exports remained the same, to what causes might it be due? 

9. If as the result of a year's foreign trade nation A obtains from 
other nations $10,000,000 in gold coin in settlement of the balance of 
international indebtedness, to what extent does that sum measure the 
gain of nation A from international trade? Reasons. 

10. The statistics of exports and imports of the United States for the 
year 1908-1909 show an excess of exports over imports of $351,000,- 



AND EXERCISES IN ECONOMICS 31 

000 in merchandise; $12,000,000 in silver and $48,000,000 in gold. 
Explain clearly bow the United States could have had an excess of ex- 
ports of merchandise, silver and gold in the same year. 

11. If demand exchange on London were selling at $4,835 ui New 
York, would that indicate anytliing as to the relative values of our 
imports and exports? Would gold be shipped luuler these conditions 
and if so in which direction? Explain. 

12. Explain clearly the condition of commerce under which demand 
sterling bills of exchange will sell at $4,875 in the New York exchange 
market. 

13. If the merchandise imports from England to the United States 
equalled the exports from the United Statts to England, what would 
be the state of exchange on London? Would there be any greater 
advantage to either of the countries engaged in trade? 

14. What effect on exchange has the holding of American bonds 
abroad ? 

15. If large shipments of wheat are made to England, will bills 
of exchange on London be higher or lower in New York? 

16. When in New York a sight draft on Loudon for £5000 sells 
for $24,150, in which direction are gold remittances likely to be mov- 
ing? Give reasons. 

17. If England sells $10,000,000 worth of our securities to Ameri- 
cans, what is the effect on exchange r^tes? 

18. Show wliat, in a gold-producing country, would be the relations 
and interaction of new gold supply, prices, relative amounts of imports 
and exports, and rate of exchange. (Sumner.) 

19. A nation with n dollars in circulation has to pay a war in- 
demnity of n dollars to another country having the same circulation. 
How much money will each then have, and wliat will be the effect 
on prices, foreign trade, rate of exchange? (Davenport.) 

20. Suppose an increase iu the volume of our currency, due to a new 
issue of silver, what Avould be the effect upon international trade? 
Would this effect be lasting? Would your answer depend at all upon 
the condition of ouv currency at the time the increase occurred? 

21. If through the improvement of our banking and currency sys- 
tem a much larger percentage of the business of the country comes to 
be done through the use of credits (rather than money) as the 
medium of exchange, what will be the effect on (a) the quantity of 
money in circulation, (b) the general level of prices, (c) the com- 
position of the country's media of exchange, (d) the international 
movement of gold, (e) the interests of debtors and creditors, re- 
spectively ? 



32 MANUAL OF REFERENCES 

22. Each one of two countries, A and B, can, by the application o| 
a given amount of labor to its material resources, produce any one 
or all of the commodities M, N, 0, P, Q, R and S, as exhibited in 
the followinff table: 



Commodity. 


Country A. 


Covntry B. 


M 


50 tons 


60 tons 


N 


1000 yards 


1100 yards 





25 bales 


20 bales 


P 


900 bushels 


800 bushels 


Q 


600 ounces 


650 ounces 


R 


5000 gallons 


5000 gallons 


S 


2500 pounds 


2000 pounds 



(a) In the absence of restrictive legislation is each country likely 
to produce all of these commodities for itself? Why or why not? 

(b) If conditions are such as to lead to the territorial division of 
labor, which commodities are most likely to be produced in each 
country ? 

(c) About which of these commodities is there the least certainty 
on this point? Why? 



CHAPTER 14 

THE POLICY OF A PROTECTIVE TARIFF 

References. 

Bolen, G. L., Plain facts as to the trusts and the tariff. 1902. Pt. II. 
Daniels, W. M., The elements of public finance. Ed., 1911. Pt. II, 

ch. VII. 
Johnson, E. H., The effect of a tariff on production. Q. J. E., 

18: 135-137. 1903-1904. 
Patten, S. N., The economic basis of protection. 1890. 
*8ource Book, 347-357, 358-360. 
Wallace, H. B., A balanced tariff. A. E. Rev., 2: 568-575. 1912. 

Questions. 

1. Can it be of advantage to trade freely with one nation if gen- 
eral free trade is bad? 

2. If there were no legal bar to a tariff between the states, would 
a tariff probably be imposed? If so, would it be a wise measure? 

3. Discuss the contention that a protective tariff by helping to 
keep out imports of foreign goods tends to maintain a favorable balance 
of trade. 



AND EXERCISES IN ECONOMICS 33 

4. "The territorial distribution of money is both a determined and 
a determining factor in international trade." 

Explain the meaning of this statement and show its relation to the 
"favorable balance of trade" argument for protection. 

5. An Englishman gave tliis argument for protection: '"If an Eng- 
lishman buys a frying pan from a German for a shilling (24 cents), 
then England gets the frying pan and Germany gets the shilJing, 
whereas if an Englishman buys the frying pan from an English manu- 
facturer for 13 pence (26 cents), England gets both the frying pan 
and the 13 pence. The increase in price benefits England because the 
money remains within the country, instead of going abroad to in- 
crease tlie wealth of foreign nations." Give your opinion of this 
argument. 

6. Discuss this statement: "The American people send abroad over 
$100,000,000 a year to pay for imported sugar. To meet this bill re- 
quires the wheat crop of over 7,100,000 acres. But all the sugar now 
imported could be grown on 1,700.000 acres in beets or cane. In other 
words we are throwing away the product of approximately 5,400,000 
acres of land by not growing our own sugar." 

7. A New York daily has contended that "Of course, we should be 
the gainers if every pound of it (raw cotton) were exported in manu- 
factured form. Every process through which the raw material passes 
in its conversion into fabrics would mean employment for American 
wage-earners." 

Discuss the proposition that the aggregate for the labor of Ameri- 
can wage-earners is less if we export raw cotton than if we should 
manufacture the raw cotton in this country for export. 

8. Assuming that an import duty on tea, if sufficiently high, would 
create a tea growing industry in the United States capable of supplying 
the whole domestic demand, trace the various economic effects of such 
a duty. 

9. Who gained when Hawaiian sugar (before annexation) was ad- 
mitted free of duty, while other sugar was taxed? 

10. If the owners of marble quarries can show that their net in- 
come is 30 per cent, greater by reason of the protective tariff upon 
foreign marbles, does this show that the tariff increases the wealth 
of the protecting country? 

11. State any proposition which you think that you can maintain 
about the relation between high or low wages and international com- 
petition. Maintain your proposition. 

12. What do you say to the plan of so adjusting duties on imports 
as to equalize the "labor cost" of imported and domestic commodities, 



34 MANUAL OF REFERENCES 

through the levy of duties which will just offset tlie higher wages paid 
by the American employer? 

13. Is a high rate of money wages an obstacle to the successful con- 
duct of industry in competition with countries where money wages arc 
low? 

14. What was the argument originally used as to the comparative 
Avage levels here and abroad so far as the starting of certain industries 
in this country was concerned? Compare this argument with the 
current protectionist argument as to the relation between the tariff 
and the present general wage level in the United States. 

15. What help should the law of wages give in explaining the present 
inequality as among the wage scales in Germany, France, England and 
the U. S.? 

16. If it would pay us to admit goods free, may we be justified in 
taxing them to force concessions from the other country? 

17- What conditions as to consumption and production at home and 
abroad would be most favorable to the shifting of an import drtj on 
a manufactured article entirely to the consumer? 

18. (a) A and B are two tropical islands inhabited by friendly peo- 
ples and producing the same commodities. The climate, soil and topog- 
raphy of A are such that all kinds of products can be produced there 
with less effort than they can be produced in B. Could there be any 
incentive for the people of A to trade with the people of B ? 

(b) Debarring all feelings of hostility and of sentimental attach- 
ment to home, is there any reason why the people of B should not all 
emigrate to A? 

(c) Could B equalize conditions of production by enacting a pro- 
tective tariff on the products of the two islands? 

(d) Suppose A were discovered after a strong civilization had 
grown up on B. Might conditions be such that A could Avith advantage 
to itself exact a protective tariff? 



CHAPTER 1.5 

AMERICAN TARIFF HISTORY 

References. 

*Blakey, R. G., The new revenue act. A. E. Rev., 6: 837-850. 1016. 
Curtis, J. F., The administrative provisions of the revenue act of 

1913. Q. J. E., 28: 31-45. 1913-1914. 
Hoffmann, I. N., Customs administration under the 1913 tariff act. 
J. P. E., 22: 845-871. 1914. 



AND EXERCISES IN ECONOMICS 35 

McKinley, Wm., History of tarill loj^islation, 1812-1896. 1896. 
Sumner, W. G., History of protoction in the United States. 1877. 
Taussig, F. W., How tari/ls sliould not be made. A. E. Rev., 1 : 20-.'32. 

1911. 
Taussig, F. W., TarifT History of the United States. 6tli ed., 1914. 
Taussig, F. W., The tarifT debate of 1909 and the new tariff act. 

Q. J. E., 24: 1-38. 1909-1910. 
*Willis, H. P., The tariff of 1913. J. P. E., 22: 1-42, 105-131, 

218-238. 1914. 

Questions. 

1. In the light of American tariff liislory what would you say were 
(1) the principal advantages and (2) the principal disadvantages of 
a highly protective tariff" as a primary source of public revenue? Illus- 
trate your points by historical references. 

2. If other countries can carry our commerce cheaper than we can 
do it ourselves and if the citizens of this country can invest their 
money with greater profit in other industries, what are the advan- 
tages and disadvantages of allowing those countries to carry our com- 
merce ? 

3. Tabulate and diagram tlie vahics of the imports and of the ex- 
ports of the U. S. to and from Ihiropc, N. A., S. A., Asia, Oceanica and 
Africa for the latest five years reported. Discuss the question of 
American exports and imports in a paragraph not exceeding 200 
words in length. Stat. Abst. (under Progress of U. S.). 

4. Make a list of the ten leading articles exported from and the 
ten leading articles imported into, the U. S. for the latest year avail- 
able. What do these show as to the position of the U. S. in inter- 
national commerce? Stat. Abst. ^ 



CHAPTER 16 

OBJECTS AND PRINCIPLES OF TAXATION 

References. 

* Bullock, 0. J., Selected readings in public finance. 1906. Chs. 

VIII, IX. 

The growth of federal expenditures. P. S. Q., 18: 97-111. 1903. 

*Daniels, Pt. II, chs. I-IV. 

Edgeworth, F. Y., The subjective element in the first principles of 

taxation. Q. J. E., 24: 4r.9-470. 1909-1910. 
*Plehn, C. C, Public finance. 3d cd., rev and cnl. 1913. Pts. I, 11. 



36 MANUAL OF REFERENCES 

Round tabic discussion of taxation. A. E. Assn. Bui., 4th ser., 

1 (no. 2) : 333-346. 1911. 
Seligman, E. B. A., Essays in taxation. 8th cd., 1913. 

Questions. 

1. Does taxation ever infringe on the right of private property? 

2. What is it a citizen gets in return for his taxes? 

3. Is there any relation between the taxes paid and the benefits 
secured from government? 

4. In what ways may we understand the proposition that taxation 
should be proportioned to ability? 

5. It is claimed by some that the use by the government of indirect 
taxes increases existing inequalities in the personal distribution of 
wealth. What reasons may be given for or against this opinion? 



CHAPTER 17 

PROPERTY AND CORPORATION TAXES 

References. 

Brooks, R. C, The German imperial tax on the unearned increment. 

Q. J. E., 25: 682-709. 1910-1911. 
Bullock, Chs. XI, XV. 
Compton, W. M., Recent tendencies in the reform of forest taxation. 

J. P. E., 23: 971-979. 1915. 
*Hamilton, Readings, 560, 561. 
Robinson, M. H., The Federal corporation tax. A. E. Rev., 1 : 691-723. 

1911. 
*8ource Book, 130-137. 
Tucker, R. 8., The British taxes on land values in practice. Q. J. E., 

29:794-819. 1914-1915. 
United States Bureau of Corporations, Report on the taxation of 

corporations. Pts. I-IV. 1909-1912. 
Special report on taxation. 1913. 
Young, A. N., The single tax movement in the United States. 1916. 

Questions. 

1. A recent newspaper item says: "This is the year real estate is 
assessed. Turn the cow loose in the front yard, tear dovm the fence, 
make things look generally dilapidated, for it will be money in your 
pocket." What does tliis indicate regarding taxation? 

2. The parts of an estate divided into fifteen equal shares by ex- 



AND EXERCISES IN ECONOMICS 37 

pert real estate agents were soon after assessed variously from $900 
to $2850 for purposes of taxation. What does this indicate? (From 
Sumner's Problems.) 

3. Explain how and why the general property tax lias been break- 
ing down in the United States with reference to the taxation of public 
service corporations. 

4. What is meant by tlie separation of state and local revenues? 
What advantages do the advocates of separation claim for their plan? 
What is your judgment with reference to its advisability? 

5. Wliat is meant by the proposition that a single tax on land values 
is paid for all time by the one who owns tlie land at the time the 
tax is first imposed? 

6. How does Massacluisotts tax interstate railroads running through 
the state? What defects, if any. do you see in the Massachusetts 
plan ? 

7. Can taxation be u.^ied to secure some of the profits of large 
corporations ? 



CHAPTER 18 
PERSONAL TAXES 

References. ** 

Adams, T. S., The effect of income and inheritance taxes on the dis- 
tribution of wealth. A. E. Rev., 5 (no. 1, supp.) : 234-244. 1915. 

The place of the income tax in the reform of state taxation. 
A. E. Assn. Bui., 4th ser., 1 (no. 2) : 302-321. 1911. 

*Blahey, R. G., The new income tax. A. E. Rev., 4: 25-46. 1914. 

Boivley, A. L., The British super-tax and the distribution of income. 
Q. J. E., 28: 255-268. 1913-1914. 

* Bullock, chs. XII, XVI. 

The taxation of property and income in Massachusetts. Q. J. E., 
31: 1-61. 1916-1917. 

Daniels, Pt. II, ch. VIII. 

Grice, J. W., Recent developments in taxation in England. A. E. 
Rev., I: 488-504. 1911. 

Hill, J. A., The income tax of 1913. Q. J. E., 28: 46-68. 1913-1914. 

Seligman, E. R. A., The income tax. Ed., 1914, 

{^mith, R. H., Distribution of income in Great Britain and incidence 
of the income tax. Q. J. E., 25: 216-238. 1910-1911. 

West, Max, The inheritance tax. 2d ed., 1908. 



38 MANUAL OF REFERENCES 

Questions. 

1. What is the present status of the inheritance tax in the American 
commonwealths ? 

2. Discuss the proposition that income is the normal source of taxa- 
tion, 

3. Outline the history of income tax legislation by the federal gov- 
ernment. What were the conditions which led to the income tax legis- 
lation of 1913? 

4. What conception of income does the recent income tax embody.' 
Illustrate some peculiar distinctions resulting from this use of "in- 
come." 

5. What is your opinion concerning the justice of progressive taxa- 
tion? 

6. Name the two principal arguments in favor of progressive taxa- 
tion. Which two arguments in favor of progressive taxation do you 
consider the strongest and why? Which two argiunents against pro- 
gressive taxation do you consider the weakest and why? To what 
kinds of taxes, if to any, is the principle of progression inapplicable 
and why? 



CHAPTER 19 
METHODS OF INDUSTRIAL REMUNERATION 

References. 

* Adams, T. S., and Sumner, H. L., Labor problems. 8th ed., 1914. 

Chs. IV, IX, X. 
Comm,ons, J. R. (Ed.), Trade unionism and labor problems. 1905. 

Ch. XL 
^Commons, J. R., and Andrews, J. B., Principles of labor legislation. 

1916. Ch. II, sees. 1-3. 
Cross, Ira B., Cooperation in California. A. E. Rev., 1 : 535-544. 

1911. 
Fay, C R., Cooperation at home and abroad. 1898. 
Oilman, N. P., Profit-sharing between employer and employee. 1889. 
Hoxie, R. F., Why organized labor opposes scientific management. 

Q. J. E., 31: 62-85. 1916-1917. 
Round table discussion. Industrial efficiency and the interests of 

labor. A. E. Rev., 2 (no. 1, supp.) : 117-130. 1912. 
Hchloss, D. F., Methods of industrial remuneration. 3d ed., i 1898. 
Virtue, O. 0., Cooperative coopers of Minneapolis. Q. J. E., 
19:527-544. 1904-1905. 



AND EXERCISES IN ECONOMICS 39 

Wolff, H. W., Neglected opportunities of cooperation. Econ. Rev., 
16: 190-206. 1906. 

Questions. 

1. With increasing division of labor is there greater or less op- 
portunity for the pajTnent of laborers according to the piece-wage 
plan? 

2. Discuss the following statement: Under the piece-work system the 
foreman looks out for the quality and the operative for the quantity 
of the work; under the time-wage system the foreman looks out for 
the quantity and the laborer for the quality of the work. 

3. What remedy has the foreman for an inefficient laborer working 
under the time-wage system? 

4. Is time- or piece-work best adapted to the following kinds of 
laborers: coal-miners, coopers, farm-hands, printers, engravers, shoe- 
factory hands, railroad brakemen, telegraph operators? 

5. Since under the piece-work system a man is paid only for what 
he does is there any reason for discharging a workman employed under 
this plan whose efficiency falls below the average? 

6. Describe any case of profit-sharing you may have seen in opera- 
tion. 

7. In the case of a cooperative general store do economic profits 
emerge? If so, where do they go? 

8. If you have seen a cooperative store in operation tell what was 
its success. 

9. Compare and explain producers' and consumers' cooperation, 
showing tlie difficulties and advantages. 



CHAPTER 20 

ORGANIZED LABOR 

References. 

*Adams and Sumner, chs. VI, VII. 

Burnett, G. E., National and district systems of collective bargain- 
ing in the United States. Q. J. E., 26: 425-443. 1911-1912. 
Barnett, G. E., The dominance of the national imion in American 

labor 'organization. Ibid., 27: 455-481. 1912-1913. 
Carlton, F. T., The history and problems of organized labor. 1911. 
Commons, chs. II, VI. 
^Commons and Andrews, Ch. Ill, sec. 1. 



40 MANUAL OF REFERENCES 

Groat, G. G., An introduction to tlie study of organized labor in 
America. 1916. 

Hoxie, B. F., Scientific management and labor. 1915. 

Hoxie, R. F., The truth about the I. W. W. J. P. E., 21: 785-797. 
1913. 

Hoxie, R. F., Trade unionism in the United States: general charac- 
ter and types; the interpretation of union types. J. P. E., 
22: 201-217, 464-481. 1914. 

Lewis, H. T., The economic basis of the fight for the closed shop. 
J. P. E., 20: 928-952. 1912. 

McCabe, D. A., The standard rate in American trade unions. 1912. 

Mitohell, John, Organized labor. 1902. 

*8ource Book, 214-227 (extract ft-om McCabe). 

Wehb, Sidney and Beatrice, Industrial democracy. 1897. 

Wolman, L., The boycott in American trade imions. 1910. 

Questions. 

1. Are the opportunities for workmen to rise to the rank of mas- 
ters as great as formerly? 

2. What are the chief causes of the origin and rise of trade 
unions? Distinguish between a trade union and a labor union. 

3. What are the conditions favorable to national agreements be- 
tween trade unions and employers' associations? Explain clearly the 
bearing of each of these conditions. 

4. Describe the practices included under the term "direct action," 
and contrast with the methods of collective bargaining and legislation. 

5. Are strikes becoming more or less frequent and important in 
your state? In answer to this question give figures from 1881 on if 
obtainable, showing number of strikes; establishments affected and to 
what extent; loss in wages and to employers. Diagram the figures. 
Ref., U. S. Bu. of Labor, Annual report, 1906. 

6. Do trade unions increase or decrease the number of strikes? 

7. If you were an ofiicer of a trade-union, Avould you begin a strike 
when trade was good or when it was poor? 

8. Does it make any difference in the permanence of an increase of 
wages brought about by a strike, whether the employer is one of the 
more successful or one of the less successful in that business? 

9. Give examples of the different kinds of boycott. What seems to 
be the attitude of the federal courts as to the lawfulness of boycotts? 

10. Is there any similarity between the methods of trade imions 
and the etiquette of the medical and the legal professions? 



AND EXERCISES IN ECONOMICS 41 

11. Some trade unions limit the number of apprentices in their 
trades. Is this a justifiable policy on their part? 

12. Of the methods employed by trade unions to raise the wages of 
their members, which are prejudicial and which are not prejudicial to 
the interests of the rest of the commuiiity, including non-union labor? 
Give reasons. 

13. Can wages be affected by the "collective bargaining" of trade 
unions and if so indicate in that connection a justification (if one 
exists) for trade union organization. 

14. If a trade union sets a minimum rate of wages lower than the 
competitive market rate would be in the absence of organization, 
which rate would the members receive? State the facts from tiie 
Source Book which lead you to your answer. 

15. Have trade unions raised or lowered the wages of non-union 
labor? 

16. What is the attitude of American trade unions toward efficiency 
systems as attempts to introduce improved methods of production (not 
systems of payment) ? 



CHAPTER 21 
PUBLIC REGULATION OF HOURS AND WAGES 

References. 

Ahhott, Edith, Progress of the minimum wage in England. J. P. E., 
23:208-277. 1915. 

Women in industry. 1915. 

*Adams and Sumner, chs. II, VIII, XII, sees. 1-4, 9, XIII, sec. 2. 

Burnett, G. E., and McCabe, D. A., Mediation, investigation and ar- 
bitration of industrial disputes. 1910. 

Clark, V. S., The labor movement in Australasia. 1906. 

Commons, chs. VII, VllI, XVIII, XXI. 

*Commons and Andrews, chs. Ill, sees. 2, 3, IV, V. 

Compton, W. M., Wage theories in industrial arbitration. A. E. 
Rev., 6: 324-342. 1910. 

Hammond, M. B., Judicial interpretation of the minimum wage in 
Australia. A. E. Rev., 3 : 259-280. 1913. 

Hammond, M. B., Wages boards in Australia. Q. J. E., 29: 98-148, 
326-361, 563-630. 1914-1915. 

Holcombe, A. N., The legal minimum wage in the United States. 
A. E. Rev., 2: 21-37. 1912. 

Kelley, Florence, Minimum-wage laws. J. P. E., 20: 999-1010. 1912. 



42 MANUAL OF REFERENCES 

Millis, H^ A., Some aspects of the minimum wage. J. P. E., 
22: 132-155. 1914. 

Mote, C. H., Industrial arbitration. 1916. 

Persons, G. E., Women's work and wages in the United States. 
Q. J. E., 29: 201-234. 1914-1915. 

Siiffern, A. E., Conciliation and arbitration in the coal industry of 
America. 1915. 

United States Bureau of Labor Statistics, Bui. 175. 1915. Sum- 
mary of report on woman and child wage-earners. 

Wehb, Sidney, The economic theory of a legal minimum wage. 
J. P. E., 20: 973-998. 1912. 

Wise, E. F., Wage boards in England. A. E. Rev., 2: 1-20. 1912. 

Questions. 

1. If you can do more work in two hours than in one, can you do 
more continuously in sixteen consecutive hours than in eight? 

2. What determines the maximum study time for tlie earnest 
student ? 

3. When does an industrious man stop working on his own fai-m, 
and why? 

4. If production is reduced one-fourtli by shorter hours, is "work 
made" to that degree for the imemployed? 

5. Defend the minimum wage policy from the M^orkman's point of 
view, and state the employers' objections thereto. 

6. Suppose it were proposed to establish by laAV a imiversal nine- 
hour day for men. 

(a) Under what conditions would you consider such a law socially 
beneficial ? 

(b) What other agencies might aecomplisli the ends whicli such a 
law is designed to effect? 

(c) What are the eliief social and economic effects which you would 
expect from such a law? 



CHAPTER 22 
OTHER PROTECTIVE LABOR AND SOCIAL LEGISLATION 

References. 

*Adams and Sumner, chs. V, sec. 3, XII, see. 5, XIII, sec. 3. 
Addams, Jane, Child labor legislation, a requisite for industrial ef- 
ficiency. A, A. A., 25: 542-550. 1905. 



AND EXERCISES IN ECONOMICS 43 

Commons, chs. XIV, XIX, XX, XXII, XXIII, XXVI, XXXVIII. 
^Commons and Andrews, Chs. VI, VII, IX. 

Fisher, W. C, The field of workmen's compensation in the United 
States. A. E. Rev., .5: 221-278. 1915. 

Leiserson, W. M., The movt'ment for public labor exchanges. J. P. E., 
23:707-716. 1915. 

Pigou, A. C, Unemployment. 1914. 

Rubinow, I. M., Tlie problem of unomplovment. J. P. E., 21 : 31.3-3.31. 
1913. 

Rubinow, I. M., Subsidized unemployment insurance. Ibid., 412-431. 
1913. 

Sumner, H. L., and Merritt, E. A., Child labor legislation in the 
United States. 1915. 

United States Bureau of Labor Statistics, Bui. 150. 1915. 

Questions. 

1. What classes of economic goods or services are regulated by law 
and why? 

2. Is there any likeness between trade-unions and tariffs? Between 
tariffs and factory legislation? 

3. What reasons are given in justification of laws closing barber 
shops on Sundays? 

4. May a person owning a lot on a residence street of a city erect 
a glue factory on it? 

5. What have you noted as to the benefits or hardships of restrict- 
ing child labor in factories? 

6. In what kinds of social legislation is the federal character of our 
government a serious bar to experimentation? Show clearly the rea- 
sons why. 

7. If population became stationary, neither increasing nor decreasing 
in numbers, and if methods were discovered which would render possible 
the production of the same amount of wealth per year as at present 
with only half the force of laborers employed, and if the average labor 
day were not shortened, would tliere not be a great and apparently 
permanent lack of employment? Discuss thoroughly and give reasons 
for your answer. 

8. In what sense is the "imemployment," so manifest in a period 
of industrial depression, evidence that the number of workers is "in 
excess of the work to be done"? 



44 - MANUAL OF REFERENCES 

CHAPTER 23 
SOCIAL INSURANCE 

Refeeences. 

Adams and Sumner, ch. XII, sees. 6-8. 

Baldwin, F. 8., Old age pension schemes: a criticism and a program. 

Q. J. E., 24: 713-742. 1909-1910. 
Commons, ch. XXV. 
*Commons and Andreics, eh. VIII. 
Foerster, B. F., The British national insurance act. Q. J. E., 

26:275-312. 1911-1912. 
Prankel, L. K., and Dawson, M. M., Workingmen's insurance in 

Europe. 1910. 
Henderson, C. R., Industrial insurance in the United States. 1909. 
Lewis, F. W., State insurance. 1909. 
National Civic Federation, Social Insurance Department, Report of 

the committee on preliminary foreign inquiry. 1915. 
Rubinoic, I. M., Standards of sickness insurance. J. P. E., 23: 221- 

251, 327-364, 437-464. 1915. 
United States Bureau of Lahor, Annual reports, 1908, 1909. 
Warren, B. S., and Sydenstricker, Edgar, Health insurance. 1916. 

Questions. 

1. Are industrial accidents more frequent in low paid or in high 
paid occupations? 

2. Suggest advantages and disadvantages of a general system of 
compulsory industrial insurance for old age, sickness and accidents. 
What are the essential diilerences between these three forms of in- 
surance ? 

3. Show to what extent a system of workingmen's insurance has 
been developed in one of the following countries: Germany, France, 
Italy, England. In the development of a general system of work- 
ingmen's insurance in the U. S., which one of the above forms will 
jirobably first come in? For what reasons has a system of this kind 
not been developed in the U. S. ? Henderson, C. R., Industrial insurance. 

y 

CHAPTER 24 
POPULATION AND IMMIGRATION 

References. 

* Adams and Sumner, ch. III. 
*Common:s and Andrews, ch. II, sec. 4. 



AND EXERCISES IN ECONOMICS 45 

Fairchild, H. P., Immigration. 1013. 

The standard of living— up or down ? A. E. Rev., 6: 9-25. 1916. 
Fetter, F. A., Population or prosperity. A. E. Rev., 3 (no. 1, 

supp.) : 5-19. 1913. (Presidential address before the Ameriean 

Economic Association, 1912, much of which is incorporated with 

chap. 24 in the text.) 
Goldemceiser, E. A., Walker's theory of immigration. Am. J. Soc, 

18:342-351. 1912-1913. 
Hall, P. F., The recent history of immigration and immigration re- 
striction. J. P. E., 21: 735-751. 1913. 
*HamiUon, Readings, 384-380, 392-395. 
Husband, W. W., The significance of emigration. A. E. Rev., 2 (no. 1, 

supp.) : 79-85. 1912. Round table discussion of above, 86-88. 
Jenks, J. W., and Laucfc, W. J., The immigration problem. 1912. 
Lauck, W. J., The vanishing American wage-earner. Atlan. Mo., 

110:691-696. 1912. 
*Matenals, 146-156. 
Maijo-8mith, Richmond, Statistics and economics. 1899. Bk. I, 

ch. V. 
Mayo-Smith, Richmond, Statistics and sociology. 1895. Bk. I, chs. 

V-VII. 
Millis, H. A., Some economic aspects of Japanese immigration. 

A. E. Rev., 5: 787-804. 1915. 
Page, T. W., The distribution of immigrants in the United States 

before 1870. J. P. E., 20: 676-694. 1912. 
Page, T. W., Some economic aspects of immigration before 1870. 

Ibid., 20:1011-1028; 21:34-55. 1912, 1913. 
Roberts, Peter, The new immigration. 1912. 
Ross, E. A., The old world in the new. 1914. 
* Source Book, 187-198. (Extract from Jenks and Lauck.) 
Warne, F. J., Tlie tide of immigration. 1916. 

Questions. 

1. Tabulate and chart the changes that have taken place in our 
immigration in regard to (1) amount, (2) character. What prob- 
lems are presented by these facts? Stat. Abst. 

2. Explain the terms "the new immigration" and "the old immigra- 
tion," and give the important statistical facts regarding them. 

3. Show the application of the doctrine of population to the present 
problem of immigration and wages in America. 

4. Do the figiu-es on immigration show anything as to the need of 
legislation restricting immigration? 



46 MANUAL OF REFERENCES 

5. What has bocu the effect of the recent immigration into the 
United States upon the use of machinery? 

6. Apply the theory of wages to explain the effect of present im- 
migration on the wages of unskilled or slightly skilled workers. 

7. If the supply of labor of any class were to be decreased ten per 
cent., would wages rise in like proportion? 

8. Is immigration now adding to the general welfare in the United 
States? State the facts and general economic principles on which 
you base your answer. 

9. If there is an immigration of half a million workers annually 
into a country for a period of ten years — during which no new natural 
resources are made available, would wages in that coimtry be affected? 
If so, of what classes of Avorkers? What would be the effect on the 
amoimt of income received by land owners? 

10. Explain how the general principles of price-determination hold 
in the determination of wages. Show how these principles apply when 
there is extensive employment of southern and eastern Europeans. 

(See Source Book.) 

11. If in a given labor market the number of laborers increases 
while the number and technical efficiency of indirect agents remains 
unchanged, what change, if any, will result in the average rate of 
wages? What change, if any, will there be in the return to the indirect 
agents ? 

12. Is common, unskilled labor "scarce" (in any reasonable sense 
of the word) in China? in the United States? 



CHAPTER 25 
AGRICULTURAL AND RURAL POPULATION 

Refeeences. 

Carver, T. N., Selected readings in rural economics. 1916. 
Carver, T. N., The work of rural organization. J. P. E., 22: 821-844. 
1914. 

Coulter, J. L., Agricultural development in the United States, 1900- 

1910. Q. J. E., 27: 1-26. 1912-1913. 
Hibhard, B. H., Tenancy in the north central states. Q. J, E., 

25: 710-729. 1910-1911. 
Hihhard, B. H., Tenancy in the north Atlantic states. Q. J. E., 
26: 105-117. 1911-1912. 



AND EXERCISES IN ECONOMICS 47 

Hibbard, B. U., Tenancy in the western states. Q. J. E., 26: 363-376. 

1911-1912. 
Hibbard, H. E., Tenancy in the southern states. Q. J. E., 27: 482-496. 

1912-1913. 
HoagJand, U. E., The movement of rural population in Illinois. 

J. P. E., 20: 913-927. 1912. 
Nourse, E. G., Agricultural economics. 1916. (A large volume of 

readings, well selected and edited.) 
Round tabic discussion. The decline of tlie rural population. A. E. 

Rev., 2 (no. 1, supp) : 51, 52. 1912. 
Round table discussion. Rural conditions in the south. Ibid., 48-50, 

1012. 
Taylor, H. C, Agricultural economics. 1905. 
Yogt, P. L., The farmer's labor income. A. E. Rev., 6 : 808-822. 

1916. 

Questions. 

1. Cite any instances you have noted of local changes of population 
distribution as between country and city. What are the chief facts 
of interest in these cases? What forces can you assign as causes of 
the changes? Has agricultural activity been accelerated or retarded? 
Has it received a set-back? 

2. A wealthy metropolitan banker purchases a large country estate 
in a section in which farming is practically on a subsistence basis 
and in which In recent years many farms liavc been abandoned. He 
applies labor and materials lavishly to the soil, sparing no expendi- 
tures for purposes which will assist in the production of crops of 
the best quality. Under what conditions can this be profitably done? 
What will be the probable effect on local agriculture, (a) if the en- 
tire product of the estate is consumed upon it? (b) if a substantial 
part of the product is marketed in competition with that of the 
local farmers? What changes are likely to occur with reference to the 
occupation of the local population? With reference to its migration? 

3. Why is it that immigrants arc noAV taking up the farms of New 
England which have, in some cases for years, been abandoned by native 
farmers? Is the fact that they are doing so an argument for or 
against the restriction of immigration? 

4. What is the general tendency of immigrants in the matter of set- 
tlement in urban and rural communities? 

5. If it is true that the relative decline of the agricultural popula- 
tion of the United States can be explained by the operation of purely 
economic forces, on what grounds is there justification for complaint 
as to the evils of concentration of population in cities? 



48 MANUAL OF REFERENCES 

CHAPTER 26 
PROBLEMS OF AGRICULTURAL ECONOMICS 

References. 

Carver, T. N., Selected readings in rural economics. 1916. 

Coulter, J. L., Marketing of agricultural lands in Minnesota and 
North Dakota. A. E. Rev., 2:282-301. 1912. 

Goldemoeiser, E. A., The fanner's income. A. E. Rev., 6: 42-48. 
1916. 

Huebner, G. C, Agricultural commerce: the organization of Ameri- 
can commerce in agricultural commodities. 1915. 

International Institute of Agricultural Statistics Year Boole. Mono- 
graphs on agricultural cooperation in various countries. 1916. 

Kemmerer, E. W., Agricultural credit in the United States. A. E. 
Rev., 2: 852-872. 

*Materials, 407, 408, 409. 

Metcalf, R., and Black, C. C, Rural credit cooperation, and agri- 
cultural organization in Europe. 1915. 

Olmsted, V. H., The purchasing power of farm products. United 
States Dept. of Agric, Report, 1912. 

*Phillips, ch. XXVII. On agricultural credit. 

Powell, F. W., Cooperative marketing of California fresh fruit. 
Q. J. E., 24: 392-418. 1909-1910. 

Putnam, G. E., Agricultural credit legislation and the tenancy prob- 
lem. A. E. Rev., 5: 805-815. 1915. 

Putnam, G. E., Farm credit in Kansas. Ibid., 27-37. 1915. 

Putnam, G. E., The federal rural credit bill. Ibid., 6: 770-789. 
1916. 

Shaw, A. W., Some problems in market distribution. Q. J. E., 
26:703-765. 1911-1912. 

*Source Booh, 34-47, 48-57, 75-80, 81-90. 

Warren, G. F., Farm management. 1913. (Treats primarily the 
problem of the individual farm, but also many of the broader 
economic questions.) 

Weld, L. D. H., The marketing of farm products. 1916. 

Questions. 

1. Why has the corporate form of business organizations not been 
as extensively introduced into the farming industry as into other 
industries ? 

2. Discuss the following statements quoted from an article on the 



AND EXERCISES IN ECONOMICS 49 

Federal Farm Loan Act of 1016. "There was no necessity for any 
kind of federal legislation affecting the land credit problem of land- 
owners. . . . There is, however, the more pressing problem ... of 
making tlie conditions of country life more attractive to the younger 
generation of farmers. In accomplishing this end some form of land 
purchase legislation is needed." Amer. Econ. Rev.. 6: 789. 191G. 

3. How do urban and rural districts differ in their preference for 
and use of different kinds of bank credit. 



CHAPTER 27 

THE RAILROAD PROBLEM 
References. 

Brown, H. (?., The competition of transportation companies. A. E. 
Rev., 4: 771-792. 1914. 

Brown, H. G., Transportation rates and their regulation. 1916. 
Clark, J. M., Some neglected phases of rate regulation. A. E. Rev., 
4: 565-574. 1914. 

Dixon, F. H., The Mann-Elkins Act, amending the act to regulate 
commerce. Q. J. E., 24: 593-633. 1909-1910. 

Dunn, 8. 0., Railway discrimination. J. P. E., 20: 437-461. 1912. 

Gephart, W. F., The place of the canal in a national system of trans- 
portation. A. E. Assn. Bui., 4th ser., 1 (no 2) : 188-196. 1911. 
Round table discussion, 197-203. 

Hadley, A. T., Railroad transportation. 1884. 

Hammond, M. B., Railway rate theories of the interstate commerce 
commission. Q. J. E., 25: 1-66, 279-336, 471-538. 1909-1910. 

Johnson, E. R., American railway transportation. 3d ed., 1908. 

Johnson, E. R., Inland waterway policy. A. E. Assn. Bui., 4th ser., 
1: 166-174. 1911. 

Johnson, E. R., The principles of governmental regulation of rail- 
ways. P. S. Q., 15:37-49. 1900. 

McFall, R. J., Railway monopoly and rate regulation. 1916. 

Materials, 627, 628. 

Meyer, B. E., Certain considerations in railway rate making. A. E. 
Rev., 4 (no. I, supp.) : 69-80. 1914. Romid table discussion of 
above, 81-100. 

Prouty, C. A., Railway discriminations and industrial combinations. 
A. A. A., 15: 41-50. 1900. 

Ripley, W. Z., (Ed.), Railway problems. 1907. 



50 MANUAL OF REFERENCES 

Ripley, W. Z., Railroads: rates and regulation. 1!)12. 

Ripley, W. Z., Railroad overcapitalization. Q. J. E., 28:601-629. 

1013-1914. 
Ripley, W. Z., Railroads: finance and organization. 1915. 
*8ourcG Book, 301-307, 368-378, 379-382. 

Questions. 

1. Why is transportation a greater problem in the United States 
than in Europe? 

2. Show in what way natural waterways have determined the loca- 
tion of leading cities in America. 

3. Give examples of cities whose growth has been caused by rail- 
roads. 

4. Upon what considerations are commodities classified for ship- 
ment by railroads? Is classification unfair discrimination? Illus- 
trate by an example. 

5. What classes of interests are affected by increasing the minimum 
weight for carloads? Explain in each case whether the effect is 
favorable or unfavorable and the reasons therefor. 

6. Does cost of service have anything to do with the rates charged 
by railroads? 

7. Give an example of a blanket rate territory and the reasons 
therefor. 

8. What is the "long and short haul" clause of the Interstate 
Commerce Act? Explain why railroads make rates which contravene 
the terms of this clause, and why the government should forbid the 
railroads to make such rates. 

9. A railroad connecting two competitive points charges one-fourth 
of a cent per ton mile on grain shipments from its inland terminus, 
while it charges one cent per ton mile on grain shipments from non- 
competitive territory. What considerations have probably led to the 
establishment of the above rates? 

Might not the railroad increase its net revenue by raising the rate 
on through traffic to one-half cent per ton mile and lowering the local 
rate to three-fourths of a cent per ton mile? 

10. The rate on corn in carload lots from Omaha, Neb. to Newport 
News, Va. is 10 cents per hundred pounds. From the Omaha region 
there are competing carriers to the Gulf and other Atlantic ports. 
The rate on corn in carload lots from points in Virginia to Newport 
News over the same route is 12 cents per hundred pounds. Could not 
the local rates be lowered if the carriers advanced the rates on the 
long-distance haul? 



AND EXERCISES IN ECONOMICS 51 

11- VVhat cases have you seen where the railroads impose unjustly 
on the public? 

1_. Give instances you have seen or heard of wliere two shippers 
paid difterent rates for the same service. 

13. Do you know any large cities that are more favorable shipping 
points than neighboring towns? 

14. What legal rights do the builders of a railroad have that are 
not enjoyed by all citizens? 

15. Can you see any clear distinction between the public nature of 
a railroad and that of a horse and carriage? 

16. What harm can there be in the acceptance of passes by judges, 
legislators, and other public officials? 

17. Ought the law prohibit the sale of tickets by "scalpers"? 

18. If your neighbor rides on a pass and you pay your fare, are 
you helping to pay for his ride? 

19. Why should preachers get half- fare rates? 

20. What are the chief reasons for the governmental regulation of 
railways? 

21. Why does the question of the control of the railways in the in- 
terest of the public present especial difficulties in America? 



CHAPTER 28 
THE PROBLEM OF INDUSTRIAL MONOPOLY 

References. 

Bolen, G. L., Plain facts as to the trusts and the tariff. 1902. 

Collier, W. M., The trusts. 1900. 

Cotter, A., The authentic history of the United States Steel Cor- 
poration. 1916. 

Hobson, J. A., The evolution of modern capitalism. Ed., 1912. 
Ch. V. 

Jones, Eliot, The anthracite coal combination in the United States. 
1914. 

King, W. I., The wealth and income of the people of the United 
States. 1915. 

Meade, E. 8., The economics of combination. J. P. E., 20:358-372. 
1912. 

Trust finance. 1903. 

Montague, O. H., Trusts of to-day. 1904. 



52 MANUAL OF REFERENCES 

Ripley, W. Z., Industrial concentration as shown by the census. 

Q. J. E., 21:651-658. 1906-1907. 

(Ed.), Trusts, pools and corporations. Ed., 1916. 
* Source Booh, 255-264. (Extract from United States Commissioner 

of Corporations, Report on the transportation of petroleum.) 
Stevens, W. 8., Classification of pools and associations. A. E. Rev., 

3:545-575. 1913. 
Stevens, W. 8., (Ed.), Industrial combinations and trusts. 1913. 
Stevens, W. 8., A group of trusts and combinations. Q. J. E., 

26: 593-643. 1911-1912. 
Stevens, W. 8., The powder trust, 1872-1912. Ibid., 444-481. 

1911-1912. 
United States Commissioner of Corporations, Report on the trans- 
portation of petroleum. 1906. 
Willoughhy, W. F., The integration of industry in the United States. 

Q. J. E., 16: 94-115. 1901-1902. 

Questions. 

1. What large trusts have recently been formed? 

2. State the motives for forming trusts, separating those which 
are socially beneficial and those which are anti-social. 

3. Enumerate the advantages possessed >by a "trust" over a small 
competitor, and indicate which of these are the results of large scale 
production and which are due to the possession of monopoly power. 

4. Are there any conditions under which a combination would be 
a more economical unit of production and distribution than a single 
plant large enough to secure all advantages to be obtained from mere 
quantity of output? If so, state them clearly. 

5. Explain carefully the causes and limits of the advantages of 
large production. GiA^e three examples of industries in which the ad- 
vantages are seen. 

6. Have you observed the growth of any local industry from a small 
beginning to large proportions? If so, how do you accoimt for it? 

7. What is the largest manufacturing establishment in your home 
town? Would a number of smaller establishments of the same sort 
and Avith the same aggregate capacity succeed as well? Why? 

8. What relation has improved transportation and other means of 
communication to trusts? 

9. What are the chief methods by which trusts or combinations 
have sought to make economies in management? 

10. Describe the characteristic features of the pool, the trust and the 
holding company. 



AND EXERCISES IN ECONOMICS 53 

11. Describe any agreement of which you know, made between mer- 
chants or manufacturers for the purpose of regulating prices. Did 
prices go up or down as a result? 

12. What is a simple price agreement? How does it differ from a 
pool? Is there any difference in the matter of legality? Reasons. 

13. \\hat are the limits to the price-fixing and profit-earning powers 
of monopolies? Are there any other conditions which will tend to 
check the indefinite growth of combinations? 

14. Mcplain and illustrate by a concrete example the circumstances 
relating to cost of production which tend to make a monopoly price 
lower than the previous competitive price for the same article. No 
reference is here intended to local or temporary cuts in price by monop- 
olies which are intent by such means on capturing a local market. 

15. If all trade is exchange, do not the members of a trust reduce 
their income when they raise the price of their products by artificial 
agreement ? 

16. Five plants engaged in the production of a given article in dif- 
ferent parts of the United States are combined under the ownership 
of a single corporation formed for this purpose. Before the combina- 
tion these five plants produced 75 per cent, of the total output of the 
article in question, each producing approximately 15 per cent.; the 
remaining 75 per cent, was produced by seven plants, no one of these 
turning out more than 5 per cent, of the total output. Each of the 
first five plants was large enough to secure all known economies in 
the costs of transforming the raw material into the physically finished 
product, and each was running to its full capacity. The aggregate 
net earnings of the five plants were $1,000,000 a year. The cost 
of reproducing these five is $14,000,000. The new corporation issues 
and pays to the owners of the properties taken over $10,000,000 in 
5 per cent, first mortgage bonds, $6,000,000 in cumulative preferred 
stock, and $8,000,000 in common stock. 

What will determine whether this combination possesses monopoly 
power ? 

Is the corporation overcapitalized? If so, to what extent? State 
clearly what you mean by overcapitalization? 

Is it probable that the earnings of the new corporation will be 
greater than the aggregate earnings of the five plants, if the price of 
the product is not increased? If so, how will this increase be gained? 

If there is an increase in earnings, how will the price of each of 
the three kinds of securities of the corporation be affected? 

17. Suppose that the effective demand for a certain kind of goods 



54 MANUAL OF REFERENCES 

in the country as a whole will vary in the following manner with 
the price changes indicated: 

$1.00 1,000,000 units 

1.10 900,000 units 

1.20 800,000 units 

1.30 700,000 units 

1.40 600,000 units 

1.50 500,000 units 

1.60 400,000 units 

1.70 300,000 units * 

1.80 200,000 units 

There are ten companies each producing 100,000 units at a cost 
of 90 cents (including all costs but an allowance for dividends on 
investment) this giving just enough of a margin to each company 
to cause it to contiriiie in the industry. What immediate effect on 
prices could a combination consisting of six firms have, assuming 
that the cost per unit of product and that the output of the inde- 
pendents remain unchanged? Show for each of the prices indicated 
what the amount of the margin made by the four independent com- 
petitors (altogether) and by the combination would be. What less 
immediate effects would be likely to follow, and why? 

18. Is granting patents an interference with trade similar to tariffs? 

19. Is it right that the lucky inventor of a popular toy should 
make $100 a day from it? 

20. Is it right that an inventor should by patent laws be able to 
keep the profits of his business high? 



CHAPTER 29 

PUBLIC POLICY IN RESPECT TO MONOPOLY 

References. 

Anderson, B. M., Jr., Competition versus monopoly the issue of the 

campaign. Independent, 73 : 997-1002. 1912. 
Bolen, G. L., Plain facts as to the trusts and the tariff. 1902. 
Brown, W. J., The prevention and control of monopolies. 1915. 
Clark, J. B., The problem of monopoly. 1904. 
Clark, J. B., and J. M., The control of trusts. Ed., 1914. 
Clark, J. M., Rates for public utilities. A. E. Rev., 1 : 473-487. 

1911. 
Collier, W. M., The trusts. 1900. 



AND EXERCISES TN ECONOMICS 55 

DavicR, J. K., Trust laws and unfair competition. 1916. 

Durand, E. D., The trust problem. 1915. See also Q. J. E., 
28: 381-416, 664-700. 1913-1914. 

Durand, E. D., The trust legislation of 1914. Q. J. E., 29:72-97. 
1914-1915. 

Ely, R. T., Monopolies and trusts. 1900. 

Gray, J. H., The control of public service corporations. A. E. Rev., 
4 (no. 1, supp.) : 18-44. 1914. Round table discussion of above, 
45-68. 

Hotchhiss, W. E., Recent trust decisions and business. A. E. Rev., 
4 (no. 1, supp.) : 158-172. 1914. Round table discussion of above, 
173-195. 

Jenks, J. W., The trust problem. 1900. 

Knauth, 0. W., Capital and monopoly. P. S. Q., 31: 244-259. 1916. 

Knauth, 0. W., Competition and capital. Ibid., 30: 578-590. 1915. 

Knauth, 0. W., The policy of the United States toward industrial 
monopoly. 1914. 

LeRossignol, J. E., Monopolies past and present. 1900. 

Orth, B. P. ( Ed. ) , Readings on the relation of government to prop- 
erty and industry. 1915. 

Ripley, W. Z., (Ed.), Trusts, pools and corporations. Ed., 1910. 

*Source Book, 383-385. The Sherman anti-trust act. 

Stevens, W. 8., The Clayton act. A. E. Rev., 5: 38-54. 1915. 
The trade commission act. Ibid., 4: 840-855. 1914. 

United States Industrial Commission, Report. 1898-1901. 19 vols. 

Wright C. W., The economics of governmental price regulation. 
A. E. Rev., 3 (no. 1, supp.) : 126-131. 1913. Round table dis- 
cussion of this paper and that of J. M. Clark, 132-142. 

Wyman, Bruce, Control of the market. 1911. 

Questions. 

1. What is the trust problem? 

2. Does the public consider the growth of trusts to be good or 
bad? What do students of the question think of it? 

3. Which one of the following views do you think to be nearest 
tJie truth and why? (a) The trust is a natural and inevitable out- 
come of modern conditions and is a distinct economic gain, (b) The 
trust is a result of special privileges and corporate abuses, (c) The 
trust is the greatest invention of this or any other age. 

4. Would it be a good thing for society if a trust made great 
economies in production, crowded out its smaller competitors, and 
maintained prices just where they were before, dividing among its 
shareholders the amounts saved? 



56 MANUAL OF REFERENCES 

5. How would the effects on society be different if prices were re- 
duced by better organization and the prevention of waste? 

6. If it could be sliown that trusts have lowered prices, should 
that fact exempt them from all interference from legislation ? 

7. Describe briefly the "unfair practices" of monopolistic corpora- 
tions. What specific features of the recent railroad and trust legis- 
lation are aimed at the prevention of these practices? 

8. Is it good public policy to allow a trust to undersell its smaller 
competitor in one district while it keeps up its prices elsewere? 

9. Are most positive laws intended to hinder competition or make 
it freer? 

10. Copy from the statutes of two states far apart, those sections 
that pertain to anti-trust or anti-monopoly legislation. Note the 
general nature of this legislation, special features, penalties for viola- 
tions, etc., and discuss. 

11. What are the main provisions in one of the following: (a) 
Sherman Anti-Trust Law, (b) Massachusetts Business Corporation 
Law, (c) The New Companies' Acts, England, (d) German Company 
Law. 

12. Abstract and discuss the Northern Securities decision. Do you 
see any argvmients to be advanced for pooling? Do you think the 
decision effective in stopping pooling? Ripley (Ed.), Trusts, pools 
and combinations. 



CHAPTER 30 
PUBLIC OWNERSHIP 

References. 

Bemis, E. W., (Ed.), Municipal monopolies. 1899. 

Brooks, R. C, Municipal Affairs, 5: 1-346. 1901. (An exhaustive 
and well-arranged bibliography on all aspects of mimicipal prob- 
lems.) 

Dewsnup, E. B., The attitude of the state toward railways, a dis- 
cussion of the question of nationalization. A. E. Assn. Bui., 4th 

Fairlie, J. A., Recent extensions of municipal functions in the 
ser., 1, no. 2: 175-187. 1911. (Vol. of Papers and discussions.) 
United States. A. A. A., 25: 299-310. 1905. 

Ouyot, Yves, Where and why public ownership has failed. Trans, 
by H. F. Baker. 1914. 

Knapp, M. A., Government ownersliip of railroads. A. A. A., 
19:61-73. 1902. 



AND EXERCISES IN ECONOMICS 57 

National Civic Federation^ Report on municipal and private opera- 
tion of public utilities. 1907. 3 vols. (A monumental study by 
an American delegation, which visited manj' cities of Europe and 
America; favorable, in the main, to extension of municipal owner- 
ship.) 

WincheU, B. L., Drift toward government ownership of railways. 
Atlan. Mo., 110: 747-7r)8. 1912. 

Questions. 

1. Does every government enterprise necessarily narrow the field 
for private enterprise and diminish the amount of competition? 

2. What forms of state activity favor survival of unfit men and 
bad traits of character? What forms help the fittest to survive? 

3. What are municipal franchises? Where are they? 

4. Why does the piiblic consent to grant patents or public fran- 
chises? 

5. What kinds of municipal industries have you seen in operation? 
How successful were they? 

6. What are the main arguments for and against the city owner- 
ship and control of gas and waterworks? What troubles arise from 
city politics? 

7. Name the industries that are owned and controlled by towns 
and cities of which you have a personal knowledge. 

Which of them are most satisfactory in your judgment? Whicli 
the least so? 

8. What is the public sentiment in your home community as to 
the ownership of industries by the town or city? 



CHAPTER 31 
SO}>IE ASPECTS OF SOCIALISM 

References. 

Brooks, J. (?., The problem of syndicalism. A. E. Rev., 4 (no. 1, 
supp.) : 115-130. 1914. Round table discussion of above, 131-157. 

Clark, J. B., Social justice without socialism. 1914. 

Ensor, R. C. K., (Ed.), Modern socialism. 2d ed.. 1907. (Selec- 
tions from socialistic sources.) 

Gladden, Washington, Tools and the man. 1893. (One example of 
a large number of American books appealing for the application 
of Christian ethics to social questions.) 

HiUquit, M., History of socialism in the United States. 1903. 



58 MANUAL OF REFERENCES 

Hillquit, M., Socialism in theory and practice. 1909. 

Hinds, W. A., American communities. 2d ed., 1908. (Describes 
many experiments, all failures; by a sympathizer with socialism.) 

Kirkup, T., Inquiry into socialism. 3d ed., 1907. (A sympathetic, 
but not a partizan statement.) 

Lockwood, G. B., The New Harmony movement. 2d ed., 1907. 

Martin, John, An attempt to define socialism. A. E. Assn. Bui., 4th 
ser., 1 (no. 2) : 347-354. 1011. Round table discussion of above, 
355-367. 

Menger, A., The right to the whole produce of labor. Trans. 1899. 
(Masterly criticism.) 

Bae, John, Contemporary socialism. 3d ed., 1901. (Standard work 
by a non-socialist.) 

Schaeffle, A., The quintessence of socialism. Ed., 1898. (Exposi- 
tion by a non-socialist, so favorable that it is used by the social- 
ists as a tract.) 

Spahr, C. B., Present distribution of wealth in the United States. 
1896. 

Spargo, John, Socialism. 1906. (Pro.) 

Walling, W. E., Socialism as it is. 1912. (Pro.) 

Walling, W. E., and others, The socialism of to-day. 1916. (A 
source book.) 

Watkins, G. P., Growth of large fortimes. 1907. 

Wells, H. G., New worlds for old. 1908. (An appeal for juster 
distribution; Fabian school.) 

Questions. 

1. In the last analysis is there anyone — retired capitalist or un- 
skilled day-worker — ^whose title to the real income he receives is 
derived solely from the property he owns, or solely from the labor 
he performs? 

2. What is it to earn a living? How many people do it? 

3. If capital is needed in production why is the question of justice 
raised when its use is paid for? 

4. What is the doctrine of economic harmonies? Give three exam- 
ples (distinct in kind) in modern legislation which run counter to this 
doctrine, with the justificaton for each of these. 

5. Define charity. Apply the general principles of charity to free 
schools, free libraries, and free clothing to school children. 

6. What is economic freedom? How different from political free- 
dom? 



AND EXERCISES IN ECONOMICS 59 

7. Is ciistuiu a bi'ttor regulator of oconomic action tlian conipeli- 
tioii ? 

S. Wliat arc vested riglitsV Do they ever stand in the way of 
progress? Examples. 

9. Distinguish between the socialistic and the competitive princi- 
ples of distribution. 

10. What classes of thinkers are most inclined to take up socialism? 
(Classes considered socially, industrially, as to race, as to economic 
and historical training.) 

11. If socialism reduced the total product, would it still be desirable 
because of the better distribution? 

12. What eflfect would it have if the state should make laborers 
work 'for unsuccesful employers at lower wages than for successful 
ones? Or should reduce rents for the less capable merchants and 
manufacturers ? 

13. Is there any rule for determining the limits of state interfer- 
ence ? 

14. If you had the power, what single public measure that you be- 
lieve would be practicable and effective would you put on the statute 
books, in order to make a juster division of the social income? Give 
reasons. 

15. The wealth of the United States increased from $7,000,000,000 
in 1850 to $188,000,000,000 in 1912. How was this wealth distributed 
according to (a) the socialistic theory of value? (b) the single tax 
theory? (c) the theory of value under competitive conditions? 

16. What are the chief ways in which the rule of competitive value 
has been nullified in this period. 

17. Would socialism guarantee steadiness or regularity in economic 
activity, thus eliminating the phenomena of economic crises and 
depressions ? 

18. In what way does taxation now shift the distribution of real in- 
comes as among persons? By what other methods and in what degree 
could such taxation be extended? 



LIBRftRY OF CONGRESS 




008 941 681 4 % 



